Friday, 25 November 2011

Tsvangirai’s Prime Ministerial baby mamas


Lothario: Tsvangirai has been linked with a string of women since his wife's tragic passing in a car accident in 2009
There's something incongruous about how Zimbabwean independent media journalists at home and in the Diaspora are reporting the debacle surrounding Prime Minister Morgan Tsvangirai's marriage-that-allegedly-never-was. Whilst the state-controlled Herald has, predictably, gleefully reported on the 'union' and its attendant soap operatic saga, the independent press has bizarrely preoccupied itself with efforts to ‘uncover’ the ‘truth’ about the origins of claims that Tsvangirai had married his lover, Locadia Tembo, a wealthy businesswoman hailing from a traditionally ZANU PF family and whose sister is an MP in President Mugabe’s party.

Newzimbabwe.com published a story entitled The curious case of Tsvangirai’s marriage on Thursday which sought to reconcile the gaps between the Tembo family’s claims of a marriage between their daughter and the Prime Minister on the one hand, and denials of such a union by Tsvangirai’s spokesman Luke Tamborinyoka on the other. The story quoted journalist and political commentator Pedzisayi Ruhanya who suggested that Tamborinyoka’s denials correctly reflected Tsvangirai’s position on the alleged marriage. Further, Ruhanya averred that Tsvangirai could be a victim of factions in his party that are trying to play matchmaker for him in a bid to gain influence and control over him.

SW Radio Africa took it a notch further with a story also published on Thursday alleging an apparent conspiracy to corner Tsvangirai into marriage. The story also quoted Tsvangirai’s aides dismissing the veracity of the marriage claims. Ruhanya also features in this story, and this time he openly fingers Tsvangirai ally and co-Home Affairs Minister Theresa Makone as the troublesome matchmaker whose interference in the Prime Minister’s private life portends ill not only for Tsvangirai himself, but for the MDC-T’s overall mission to deliver democratic change. It is hard to quarrel with Ruhanya’s perspective on the goings-on within the MDC-T as he is solidly well-informed on the subject.
Married or merely 'damaged'? Tembo is said to be carrying Tsvangirai's twins

All this is very well and makes for interesting reading too, what with the sense of political intrigue and sex scandal it throws up all at once. Indeed, the story has provided much comic relief to legislators in Parliament, where the Prime Minister was yesterday mockingly hailed as a ‘ZANU PF’ son-in-law by MPs from that party as he arrived for the national budget presentation by Finance Minister Tendai Biti.

However, what I found most disturbing and disheartening about the independent media’s reporting (I’m not addressing the Herald for obvious reasons – they have no pretensions about their partisanship!) on this latest Tsvangirai debacle was their apparent diversion of popular attention from the real controversies of this episode. What’s beyond dispute is that the Prime Minister has made yet another young Zimbabwean woman pregnant, and out of wedlock. Immediately after official denials from Tsvangirai’s office rolled into newsrooms, alarm bells should have rung long and shrill about the falling moral probity of a national leader, a father figure, a grandfather and, inevitably, a role model for young men across the country.

The confirmation by his office of Tsvangirai having paid damages to the Tembo family in acknowledgement of his responsibility for Locadia’s pregnancy should have elicited hard questions by the media about the growing notoriety of the Prime Minister’s salacious lifestyle in the wake of his wife Susan’s tragic passing in 2009. The insistence of the Prime Minister’s office that Tsvangirai had only paid damages and no marriage had taken place seems to put it beyond doubt that Tsvangirai has no intentions to take Locadia as his lawfully wedded wife now or any time in the future. Otherwise, why create all this hullabaloo between two people who have every intention to live together happily ever after?
One notch in along string? The PM with Arikana Chihombori

Journalists are no secret-keepers for the PM and they’re doing him no favours by failing to hold up his increasingly embarrassing lifestyle to public scrutiny under the specious excuse that it is his private business. Well, for what it’s worth, it ceases to be his private business if young people living in one of the most HIV/Aids-affected societies in Sub-Saharan Africa should find encouragement to eschew condom use because their Prime Minister goes ‘bareback’ and still appears untouched by disease.

You might say that’s a presumptuous conclusion, but not so if you factor in poor Loreta Nyathi, the young Bulawayo girl whom the Prime Minister allegedly knocked up and left to raise his son on her own and whome he claimed to not remember. And that brings me to another worrying point – this apparent sowing of wild oats by Tsvangirai. One expects an irresponsible young man who knows no better – nhubu yomunhu - to leave a litany of baby mamas across the country, not the Prime Minister! Anywhere in the civilised world, this unbecoming and morally reprehensible behaviour would have haunted any politician into resignation, but not so in Zimbabwe.

Powerful men have carte blanche to behave outrageously when it comes to sexual affairs, and society tends to acquiesce to this appalling indulgence. Journalists sustain it by nibbling at the periphery of these disquieting moral contradictions, preferring to leave the core of the matter publicly untouched. They do gossip of course, over a beer or two, about all the skirt-chasing and altogether unbecoming behaviour of national leaders which they’re privy to.

Perhaps the new crop of national leaders from the MDC believes that any public scrutiny of their sexual lives is unfair, since many of their ZANU PF colleagues have enjoyed more than 30 years sexual and material profligacy unmolested by hostile press publicity. That is largely true, of course – many ZANU PF politicians have, over the decades, sired multitudes of fatherless children and sunk into putrefying sexual scandals involving small houses and even under age girls as well as gay lovers, in spite of their leader’s trenchant homophobia.

However, these ‘Chinja’ leaders have come into public life at a new historical juncture, and they have found a generation that seeks to escape the scourge of HIV infection and make up for the country’s sad loss of human capital over the last 20 years. Key to that survival is the restoration of its moral fibre, which can only be achieved by this generation taking responsibility for its future. The growing readiness to be tested and to know one’s HIV status means this generation is ready for openness and accountability in moral as in political matters.
Journalist Pedzisai Ruhanya: 'Romance will shape Tsvangirai's destiny'.

This is the generation that Prime Minister Tsvangirai wants to lead as president of the country. He may very well still do so in future, but presently his own personal affairs are an incorrigible mess. Hardly the picture of inspiration for aspiring young Zimbabweans, and firebrand independent politician Margaret Dongo is right to excoriate Tsvangirai for ‘dropping his pants everywhere’ and impregnating women. Pedzisai Ruhanya’s insightful observation that romance could shape Tsvangirai’s destiny appears even more illuminating in light of recent developments. 

Monday, 7 November 2011

Resource nationalism takes hold in Southern Africa

ANC Youth League president Julius Malema leads thousands of party cadres on a 56km 'march against poverty' from Johannesburg to the capital Pretoria recently
IT WAS Zambia’s then-opposition Patriotic Front (PF) leader Michael Sata’s shots across the bows to Chinese miners during the 2006 presidential election that brought the issue of resource nationalism in Southern Africa into sharp focus. The following year, south of the Zambian border, Zimbabwe was to pass a law claiming majority equity for black locals in foreign-owned mines, among other businesses.

Further down south, a resurgent radicalism among the party’s youth was to assert its boisterous confidence with Jacob Zuma’s election as the new leader of South Africa’s ruling ANC party in December 2007. Four years later, President Zuma’s government stands buffeted by the powerful ANC Youth League and its firebrand leader Julius Malema’s demands to nationalise the country’s vast mining sector.

Back in Zambia, Sata is now the new tenant at State House after putting an unceremonious end to the 20-year reign of President Rupiah Banda’s Movement for Multiparty Democracy (MMD) in elections held in September. His fiery nationalism drew the admiration and support of largely young and unemployed Zambians who feel left out of the mining boom that has made the country’s economy one of the best-performing in Africa.
Sata is sworn in as the new Zambian President, bringing an end to the MMD's 20-year rule

Chinese companies have become key players in Zambia’s economy with total investments by the end of 2010 topping $2bn, according to official Chinese government data. Hungry for raw materials to power its burgeoning economy, the Asian dragon has in recent years led the influx of foreign direct investment (FDI) in natural resources in Africa, contributing to the continent’s accelerated growth.

Africa’s GDP growth rate is approximately 5% a year and is forecast to continue at this pace or faster. African countries face the challenge of translating this resource boom into continued and sustainable economic growth, as well as ensuring that it benefits ordinary citizens and is consistent with national and regional development priorities.  

‘The resource nationalism trend appears to be gathering pace in Southern Africa,’ observed Peter Leon, a South African legal expert who co-chairs the International Bar Association’s Mining Law Committee. Efforts by countries to secure an equitable share of their natural resources have led to calls for outright nationalisation, indigenisation, or state control of strategic minerals.

In response, mining companies have no choice but to surrender to the sovereign right of resource-endowed countries to establish a stronger participation in their mineral industries. If they should pull out, other companies with much less to lose stand ready to take up their place. This is already happening in Zimbabwe, where foreign miners in the country are moving to comply with indigenisation regulations forcing them to cede at least 51% of their stock to local blacks.

According to the Export Finance and Insurance Corporation (EFIC)’s World Risk Developments newsletter for September, resource nationalism is proving to be a clear and present risk for miners as ‘governments in a variety of countries are examining options to gain a greater share of the windfall profits flowing from strong commodity prices.’

Advisory and accountancy firm Ernst & Young (E&Y) also noted in a recent report that resource nationalism is the biggest threat facing the mining sector this year and next as governments seek to take advantage of higher commodity prices to try to restore fragile finances.

‘Because the mining and metals sector rebounded quickly from the global financial crisis, it became an early target to help restore treasury conditions,’ the firm said, adding that it had identified at least 25 countries in 2010/11 that had increased, or announced plans to increase, their government take via taxes or royalties. E&Y also observed a growing trend by governments to seek to increase local participation in investment projects.

Mick Davis, chief executive of the London Stock Exchange-listed mining company Xstrata lamented the pattern by many resource-rich countries to pursue retrospective changes to mining contracts as they seek to increase rents from their natural resources. “Changes in resource rent sharing between the owner of the resource and the beneficiator of that resource should be prospective not retrospective,’ he wrote in Xstrata’s halfyearly report for 2011.
Xstrata's chief executive, Mick Davis

‘Mining companies take on board significant financial, development, construction and then operational risk when they invest their capital in projects. It is not sound policy to rewrite the basis on which those investments were made after the risks have been borne and the investment implemented.’

But according to EFIC, apart from a handful of countries, most seem intent upon not carrying resource nationalism to the point where it ‘kills the goose that lays the golden eggs’. Most countries have shied away from nationalisation and seem content to increase taxes and royalties, or buy into resource ventures, or both. In some countries the promotion of resource nationalism is consistent with healthy private investment and production, EFIC said. But others, such as Zimbabwe and South Africa, could threaten profitability and force mine closures and therefore needed to be watched closely.

Ever touted as the paragon of stability and good corporate governance, Botswana is the highest ranked African mining country in this year’s Fraser Institute report. The E&Y survey also hailed the country as a good example of how African governments can balance collective and individual participation in mining. The diamond-rich country jointly owns Debswana, the world’s leading producer of diamonds by value, with De Beers in a successful public-private partnership.

Mozambique also belongs to the more cautious group of resource-endowed countries as it treads carefully towards a review of its mining laws. Dubbed the world’s last coal frontier on account of its massive coalfields in the northern Tete Province, the country reportedly favours increased royalties and taxes on new mines, a 10-20% stake in ‘strategic’ projects for the state mining firm, and licence cancellation for firms that fall behind with their agreed development schedule, but has not hinted plans for a windfall profits tax.

Mines Minister Esperanca Bias said back in July that the review may be completed by year-end and emphasised that ‘we will not do anything without discussing with the companies.’ Unlike other countries in the region, Mozambique has no local ownership or equity requirements for miners and it is unclear if that could be subject to change. Mining accounts for less than 5 percent of the former Portuguese colony’s economy despite large deposits of coal, tantalum, gold and other minerals.

In Zambia, however, the mining sector is in for some anxious times, at least in the short term, as Sata sets about reconciling the promises of his election manifesto with the realities of the Zambian economy. He has moved quickly to suspend theissuance of new metal export permits ahead of the release of new guidelines. Analysts say Sata has been rightly concerned about exporters misreporting the amount of ore leaving the country and has directed that all export payments would now have to be handled by the central bank. But more significantly for the country’s miners, the new government wants to increase its shareholding to at least 35% in all mining projects.

‘But that will depend on how well we negotiate with the mining firms,’ Zambia’s Mines Minister Wylbur Simuusa made sure to point out in an interview with Reuters in early October. He swiftly allayed fears of nationalisation, saying: ‘We just want to have more benefits from the mines. There is no cause for apprehension, because nothing will be done without consulting the mining companies.’

Arguments in favour of resource nationalism have noted how mining companies, with their disproportionate might in relation to poor African governments, compel them to accept skewed terms that undermine their own people’s interests. Zambia’s current tax collection system is a case in point.

‘We want to introduce a tax collection mechanism based on production or earnings. Under the current system, which is profit-based, some mines have been declaring losses for the last 10 years,’ Simuusa said.

Growing disillusionment with their failure to benefit from resource extraction in their countries has engendered more radical approaches by some of Southern Africa’s nationalist governments. Earlier this year Namibia announced that it intended to declare copper, coal, gold, uranium, and zinc as strategic minerals, and thus subject to ‘additional national protection’.
Namibia's Mines and Energy Minister Isak Katali

Mines and Energy Minister Isak Katali said the state-owned mining entity, Epangelo Mining Company Limited (Epangelo) would now enjoy exclusive exploration and mining rights to all these minerals and that interested investors would in future be required to partner with Epangelo. The move sent jitters up the spines of mining investors as far afield as London, The Namibian newspaper claimed. The country is currently working on new mining legislation to effect the indigenisation of control over its minerals.
           
Whereas Zimbabwe has openly played its hand on indigenisation, South Africa’s ANC party is agonising over whether or not to nationalise the country’s mines. Its decision-making organ, the National Working Committee, appointed a research team in February this year to investigate and report back in a year on the feasibility of mine nationalisation. ‘This decision has left a cloud of uncertainty over the industry for the next year as it awaits the recommendations of the ANC’s policy conference in June 2012, followed by its elective conference in December 2012,’ Leon observed, ‘All of this potentially increases the country's sovereign risk profile.’

Mining investors are not expected to stay away, whatever the outcome of the ANC’s policy debate. ‘The few high-quality ore reserves left untapped in the world are largely located in Africa. As such, companies are unlikely to leave, even in the face of higher taxes and tougher economic terms,’ Javier Blas, the Financial Times’ commodities editor, concluded. 

Thursday, 29 September 2011

Angola: A changing of the guards?

Farewell? The quiet godfather of Angolan politics has signalled his intention to step down from the presidency after more than three decades. However, analysts believe he will continue to be the power behind the throne.
Southern Africa’s longest-ruling leader Jose Eduardo Dos Santos of Angola is a man whose 32 years in office belies the security of his hold on the oil rich country. Ushered to the fore of national life when the country’s founding President Agostinho Neto died of cancer in office in 1979, Dos Santos is moving to ensure that his departure from power is as gradual and planned as his assumption of it was fortuitous and sudden.

In the opaque internal workings of the ruling Popular Movement for the Liberation of Angola (MPLA), which is one of the region’s most hardened liberation movements-turned-governments, it has not often been easy to decipher the party’s plans on the hitherto taboo question of succession. However, in early September the Angolan Novo Jornal newspaper set the country abuzz when it reported that the 69 year-old son of immigrants from Sao Tome and Principe was to stand down as president before or after next year’s elections.

The chosen one? Sonangol's Manuel Vicente
Quoting unnamed MPLA sources, the weekly claimed that Dos Santos had picked Manuel Vicente, head of the state oil company Sonangol, as his successor. Party spokesman Rui Falcao de Andrade also told business news publisher Bloomberg that the MPLA will meet in December to appoint its presidential candidate for next year’s election and was currently ‘talking about probabilities’ although no formal decision by the party had been taken. According to the country’s 2010 constitution, only MPs are now directly elected by the people, and the person who is named at the top of the party list of the winning party automatically becomes president.

The news coincided with planned anti-Dos Santos protests in Luanda, leading to speculation that the MPLA may have sought to pacify increasingly restless opponents by promising impending change at the top. Riding on the coat-tails of the Arab Spring, which toppled longstanding dictatorships in North Africa, Angolan activists have several times this year held protests calling on Dos Santos to step down. On 25 September, a day after MPLA supporters had demonstrated in support of Dos Santos in Luanda, police crushed an anti-government protest by youths.    

The man at the steering wheel of Sonangol and the President share a striking similarity: both are trained engineers with a background in the oil industry. Vicente is a career technocrat who understands the country’s oil industry like the back of his hand. He has been at the helm of Sonangol since 1999 and has spent two decades with the company whilst simultaneously juggling other corporate roles and consultancies. At face value, he has no basis to feature as the leading figure in a cast of MPLA contenders for the leadership of Southern Africa’s most militarised state.

But his appointment to the ruling party’s powerful politburo in 2009 as well as the critical role that Sonangol occupies within the parallel governing structure that is tightly woven around the country’s presidency suggest that Vicente is far much more than a politically connected corporate suit. In a June 2011 situation report on Angola published by the South Africa-headquartered Institute for Security Studies, Africa analyst Paula Cristina Roque described the country’s political order as composed of parallel ruling structures, with the ‘formal, fragile’ MPLA government on one hand, and ‘the more resilient ‘shadow’ government controlled and manipulated by the presidency [on the other], with Sonangol […] as its chief economic motor.’

Among other things, this shadow government is responsible for the formulation of international policy independently of the established government and foreign ministry, Roque added, and ‘to a certain extent, Sonangol is the vehicle used to control the international image of Angola, investing internationally in the strategic areas of telecommunications, gas and petroleum as well as the banking sector,’ she said. Sonangol, and, to a lesser extent, Endiama (the national diamond company), play a central role in the management of the state and in the MPLA’s financial strategy. This background makes Vicente a strong candidate to fulfil for Dos Santos the role that Dmitry Medvedev played in Russia for the outgoing President Vladimir Putin in 2008.

‘The president will likely look to implement an organised hand-off to Vicente or another trusted ally while remaining, like Vladimir Putin in Russia, the power behind the throne for an interim period,’ Philippe de Pontet, Eurasia’s Africa director, wrote in a recently published research note. Analysts say Dos Santos could lead the party to another victory in the 2012 elections and retire from the presidency thereafter whilst remaining MPLA leader, leaving Vicente to run the country without the threat of imminent elections. He could also appoint Vicente as his vice-president in preparation for him to take over the reins at whatever point he wishes to step down. This prospect gained currency in view of Vicente’s own announcement earlier this year that he will be leaving Sonangol before year-end.

The expectant one. Vice President Nando
However, this would mean superseding the powerful securocrat and current Vice President Fernando da Piedade Dias dos Santos who also served as the country’s prime minister from 2002 to 2008. The 61 year-old ‘Nando’, as he is known, is said to control a paramilitary group of 10,000 rapid response units (‘Ninjas’), the police, and is not known to be overly compromised by corruption. Long seen as the President’s right-hand man and a clear front-runner for the top job, his elevation to the vice-presidency was widely perceived as a preparatory step for the ultimate office.

De Pontet said the old MPLA guard would likely be more comfortable with a seasoned party insider such as ‘Nando’ with his security background, although this would raise a bigger question mark for investors. ‘In the past, Dos Santos has stared down such sentiment, and can likely do so again, particularly if party cadres know that he will continue to be the prime power-broker behind the scenes. Defying Dos Santos tends to be a poor career move,’ he added.

‘Vicente’s main weakness in the MPLA is his relatively tepid and only recent commitment to the party, an institution that takes itself very seriously. He lacks a military pedigree or credentials from the civil war, which loses him support from the old guard and influential ex-generals. This could potentially limit his ability to drive economic reforms over internal party opposition.’

In with a chance? The technocratic Feijo
Sebastian Spio-Garbrah, an analyst at DaMina Advisors, a frontier market risk consultancy, expressed surprise at the choice of Vicente as the man to replace Dos Santos saying he will likely have to grapple with tense relations with the dozens of disappointed ministers and ex-military leaders who had always hoped that the President would have drawn his successor from among them. ‘Dos Santos, himself an oil engineer trained in Azerbaijan, was likely drawn to the similar personality and energy savvy of Vicente, as well as their close personal relations. Dos Santos had historically been very weary of allowing any single minister to gain too much popular influence, and regularly reshuffled his cabinet to keep his ministers on their toes,’ he said. 

However, most analysts agree that Vicente’s status as a respected figure in international business circles will likely be reassuring to investors especially if his presidency is backed by Dos Santos’ power exercised quietly from behind the scenes.  In 2008 Angola held its first elections since the advent of peace following the killing of Jonas Savimbi, leader of the-then rebel movement UNITA in 2002. The MPLA romped to victory with 82 per cent of the vote, but presidential elections were put on hold as a cross-party commission drew up a new constitution, which was subsequently approved in January 2010. It abolished the position of prime minister, which was replaced by a vice president. UNITA, which once held 70 parliamentary seats after the 1992 elections, only managed 16 in 2008. 

Having lost its statutory funding of up to $14m in the process, UNITA is certain to offer only feeble opposition to the Sonangol-powered MPLA juggernaut.

Academic and MPLA veteran, Neto
According to a 2011 report assessing risks to stability in Angola, the Washington-based Centre for Strategic International Studies (CSIS) said poverty is the single most important issue which could lead to instability. ‘The mean schooling years for an Angolan adult are just 4.4 years, life expectancy is 48.1 years, and a staggering 22 per cent of newborn babies will not survive beyond their fifth birthday,’ the CSIS report noted. At 2.6 per cent per year, Angola has a rapidly growing population even by Sub-Saharan African standards, and more than two-thirds of it is 20 years of age or younger whilst 70 per cent of the country’s estimated 19 million are crammed in the barely capable urban areas. Coupled with yawning inequalities and rampant corruption, these demographic trends do not augur well for a stable and secure future unless the government moves to deliver basic sanitation, health care, education and jobs faster than it is currently managing. With restless youths becoming more daring in challenging the government, whoever succeeds Dos Santos has his work neatly cut out.

Zimbabwe's indigenisation policy confounds investors


Indigenisation Minister, Saviour Kasukuwere enjoys President Mugabe's full backing

Zimbabwe’s economic indigenisation programme has rendered the country a very uncertain place to do business for white nationals and foreign investors. Harangued by bellicose threats of closure one minute, and mollified with promises of investment protection the next by a government apparently playing good cop-bad cop with foreign-owned banks and mining conglomerates, it is no wonder that they should feel thoroughly confounded.

The controversial black economic empowerment legislation was passed by a majority Zanu PF parliament in 2007, placing statutory requirements on targeted businesses to cede at least 51 per cent of their equity to black Zimbabweans. The deadline for mines to comply with these regulations expired on 24 September, and the fledgling economy has not seen more unpredictable times.

Driven by President Robert Mugabe and his Zanu PF party, the indigenisation programme has faced its most trenchant opposition from Prime Minister Morgan Tsvangirai, who formed a coalition government with the demagogic Mugabe in February 2009 following disputed elections a year earlier. The MDC leader blames his power-sharing partners for the policy inconsistencies that have wrong-footed economic recovery.

‘Mugabe comes out and tells investors, ‘your investment is safe’, and then indigenisation minister Saviour Kasukuwere says, ‘I want to close this and that mine.’ This kind of policy conflict cannot inspire confidence,” Tsvangirai told supporters commemorating his party’s 12th anniversary in Harare last month. He was referring to Kasukuwere’s outlandish threats to shut down foreign banks and mines that failed to comply with the indigenisation regulations.

Only a few weeks earlier, Mugabe had reassured foreign investors saying: ‘Other possible investors are still waiting in the wings, some possibly frightened about Zimbabwe because of its reputation given by the media in the West. We say come, don’t be afraid. But come as friends and not as exploiters.’

But no sooner had the ailing 87 year-old leader given his nebulous reassurances than Kasukuwere emerged to strike fear at the heart of the country’s financial sector with threats to shut down Standard Chartered, Stanbic, and Barclays - the only three foreign banks operating in Zimbabwe. He also announced the imminent closure of more than 50 mines, including the platinum giant Zimplats which is on the verge of proceeding with a planned $460 million expansion project that would bring its total investment in Zimbabwe to close to $1 billion.

The government had in 2006 signed a ‘Release of Ground Agreement’ with Zimplats providing the company – 87 per cent owned by Implats of South Africa - security of tenure over mining claims required for the long-term expansion programme. However, it now sought to amend certain aspects of that agreement and also rejected Zimplats’ idea that firms could sell their shares to black Zimbabweans by listing them on the stock exchange.
In a policy twist that brought relief to Zimplats and other threatened miners, albeit doing little to clear the confusion, mines minister and the country’s mines licensing authority Obert Mpofu sought to calm restive investors by declaring that his ministry had no intention of cancelling mining licenses. It is believed Kasukuwere was leaned upon to accommodate Zimplats.

As the Economist magazine observed, the threats against the foreign mining companies seem reminiscent of a shakedown game: ‘the investors are terrorised with the imminent risk of closure, they are hit with various deadlines and ultimatums, and then they are allowed to negotiate a deal to continue in business.’

Despite these conciliatory remarks, investors still remain unsure as to whether the government could be trusted. The prevailing sentiment at the mining indaba was that this new tone could change any time it suited the government’s ends and that with the rules of engagement so undefined it was impossible to really know what could happen.

The government wants to set up a sovereign wealth fund which will hold shares in various mining businesses, according to Kasukuwere. But the crucial question is how cash-poor Zimbabwe will afford to pay for more than half of all foreign and white-owned equity across the economy. Kasukuwere is on record as having said that with respect to paying for mining equity, the mineral reserves in the Zimbabwean soil were sufficient payment, which suggested that the government seeks to take control of the mining sector without paying a cent for it.

According to Reuters, ‘investors and foreign companies are unsure if they will be compensated if they give up the stakes. Even if compensation is offered, many wonder how the government can afford it with foreign debt already at 115 percent of GDP’.

Chinese firms do not suffer such anxieties, however, as they were exempted from full compliance with the indigenisation regulations because they supported vital sectors of the economy. But Kasukuwere has made it clear that he will not exempt ‘companies from countries which have put our country under sanctions’. The US and the EU have since 2001 and 2002, respectively, maintained targeted sanctions on Zimbabwe in protest at the country’s human rights record.

In the banking sector, Kasukuwere is at war with Reserve Bank governor Gideon Gono, an open critic of the current indigenisation model. Responding to Kasukuwere’s two-week ultimatum to the three foreign-owned banks to submit their indigenisation plans to government, Gono warned the minister against ‘reckless’ and ‘excitable flexing of muscles’ which ‘could irreparably harm the nerve-centre of our recovering economy’.
RBZ Governor Gideon Gono (left) and Finance Minister Tendai Biti

But the abrasive Kasukuwere, who clearly enjoys Mugabe’s full support, insisted he was the authority on implementing the government’s indigenisation law and nonchalantly dismissed Gono’s intervention. Finance Minister Tendai Biti, a key Tsvangirai ally and favourite with the IMF and donor countries, has waded into the banks indigenisation saga to negotiate an agreed threshold with Kasukuwere and the affected banks. ‘One thing that we have made clear to the Minister of Indigenisation is that banks are different from mines. Mines sit on capital. Banks are middleman. They are conveyors of capital. A bank is as good as its deposit base so naturally a different approach has to be taken,’ he said.

The Bankers Association of Zimbabwe is opposed to the statutory indigenisation of Barclays, Stanbic and Standard Chartered banks arguing that it is not necessary since 85 per cent of the country’s banking sector is locally owned. Indeed, many critics of Mugabe’s indigenisation policy hail the indigenisation model that opened up the financial sector to new local investors over the past two decades as it focused on creating new capacity within the economy and bringing competition in the financial services sector.

Critics of the empowerment policy within and outside Zanu PF fear that ministerial discretion over the selection of empowerment partners for foreign firms will benefit Zanu PF’s dwindling patronage system. The party could easily give empowerment-related funds as well as access to indigenised equity only to its loyalists. Mugabe, faced with a deeply divided party and opposition to his plans to fight yet another election as the Zanu PF candidate early next year, is keen to dangle this new carrot to secure the support of party stalwarts.

Critics also say the policy is merely a top-down empowerment strategy that will only indigenise the elite and only saddle average citizens with the negative impact of its failure through declining productivity and job losses. The policy battles within Zanu PF as well as in the coalition government mean that there will be no quick end to the confusion for foreign investors as implementation of the indigenisation programme will remain a slow, grinding affair.

Wednesday, 17 August 2011

Social networks break news of Mujuru death - Newsday: Everyday News for Everyday People

Social networks break news of Mujuru death - Newsday: Everyday News for Everyday People

Retired General Solomon Mujuru aka Rex Nhongo died in a house fire at his farm in Beatrice, just outside of Harare.
Zimbabwe's traditional media needs to make greater use of social media. None of them run any live blogs by their reporters to enable them to break news in real time and give minute-by-minute updates of trending topics; a reporter blogging live updates from their mobile phone right from Gen. Mujuru's farm describing what's transpiring, for instance. Short audio and video clips i.e of interviews or vox pop on websites cld provide a multimedia experience and scoop ZBC, thus challenging it to wake up or seal its lethargic approach to reporting news in the information age. With superspeed broadband being laid out in Zim, the future of news media belongs to those that will embrace this technological revolution.

Wednesday, 10 August 2011

Why is Africa still hungry?


Somali refugees wait for precious food handouts at Dadaab camp


FROM the cliff of television screens in western homes, images of emaciated African children with throngs of flies buzzing over their parched mouths fall like boulders, crashing audiences into an outpouring of sympathy and philanthropy.

Purveyed by the global media on an industrial scale, this harrowing pornography of human suffering has become standard fare in humanitarian appeals by western aid agencies in response to perennial famine on the African continent. Despite accusations of perpetuating negative stereotypes of the African condition, this formula has worked quite effectively for the aid agencies in mobilising massive amounts of food and basic necessities for humanitarian relief on the continent.

But after generations of disaster shock therapy, aid agencies fear that citizens of richer societies may have been fatigued by the unending cycle of suffering and helplessness. The slow global response to the current famine in the Horn of Africa, where the UN says tens of thousands – mostly children -have died so far, is a case in point.

Donor fatigue thus poses serious concerns for those facing acute food shortages because western humanitarian relief remains the most visible intervention and often makes the difference between life and death in situations of serious hunger. This unpalatable reality sorely underlines Africa’s woeful incapacity to come to the aid of its own in times of famine.

According to the UN Millenium Development Goals report for 2011 released last month, African children remain the most undernourished in the world, with countries such as Ethiopia, Mozambique, Zambia, Angola and the DRC among the most vulnerable. ‘The poorest of the world are being left behind. We need to reach out and lift them into our lifeboat,’ UN chief Ban Ki-moon said during the launch of the report in Geneva.

‘Based on current trends, sub-Saharan Africa will be unable to meet the hunger-reduction target by 2015,’ the UN reported. By contrast, South-Eastern Asia, Eastern Asia and Latin America and the Caribbean are said to be on course to meet the target.

Stephen Devereux, an expert in food security and rural livelihoods at the University of Sussex who has worked in East and Southern Africa, says that during the twentieth century, famine was effectively eliminated from most regions of the world except Africa. ‘There has been no famine in Europe since the 1940s, in East Asia since the 1960s, or in South Asia since the 1970s,’ he observed. Ethiopia recorded the continent’s worst famine in 1984-5 when an estimated 590,000 people died.

Internally displaced women await assistance in Mogadishu

But why are contemporary famines exclusively confined to Africa? In the first decade of the twenty-first century, Africa saw famines in Ethiopia, Malawi and Niger (in 2000, 2002 and 2005, respectively), and the second has kicked off this year with hunger and death in the Horn of Africa. The UN says East Africa is experiencing the worst drought in 60 years, with more than 10 million people threatened by starvation in four countries - Somalia, Ethiopia, Kenya and Djibouti.


In its Global Information and Early Warning System for June 2011, the Food and Agricultural Organisation (FAO) identified 30 countries requiring external assistance for food, 23 of which are in Africa. The reasons given for their need include exceptional shortfall in aggregate food production or supplies, widespread lack of access, and severe localised food insecurity.

According to FAO’s East Africa representative Mafa Chipeta, Africa consumes about 33 per cent off global food aid with Eastern Africa, which holds 3.6 per cent of the world’s population, consuming nearly 20 per cent of global food aid in normal years and more during drought periods.

‘In most African countries, food production is rising slower than population. For instance, in Southern Africa, between 1980-2001, cereals output rose
3 per cent whilst population grew by 34 per cent,’ he observed.

In Chipeta’s view, fast population growth coupled with the kind of armed conflicts that have blighted countries such as the DRC, Somalia, and Eritrea and Ethiopia have undermined agriculture. ‘In addition, there is inadequate public investment for agriculture, poor incentives to producers, and instability of policies and approaches to development,’ he added.

In a paper titled ‘Why does famine persist in Africa’, Devereux contends that famines in Africa are the outcome of three main causes: production failure owing to droughts, environmental processes and population issues; exchange failure, or economic reasons determining food availability and affordability, and response failure by governments and aid agencies to intervene to protect household food security following supply and/or demand failures.

It was Indian economist and Nobel laureate Amartya Sen who broke down the sources of all legal food to three – production, exchange (purchase or barter), and transfers (including food aid); and famine occurs when all three have failed.
According to Devereux, ‘food production and/or market access to food might fail, leaving people vulnerable to starvation, but a famine only occurs once there is also a failure of response - lack of transfers of food or cash to buy food’. He argues that the recurrence of humanitarian appeals in Africa reflects failures of policy to address fundamental vulnerabilities in African livelihood systems, which requires a range of pre-emptive measures and broader developmental interventions.

‘[A] concerted effort to eradicate famine in Africa requires intervening to reduce vulnerability and risk in each of the three areas discussed above: production, exchange, and response,’ he suggested.

Tackling production risks means addressing the vulnerability to food insecurity of the smallholder farmers who dominate the continent’s agricultural regions and who often grow a single or narrow range of crops for subsistence. Climate change is likely to make this situation worse, with the projected invariability of rainfall set to make planning difficult and harvests more precarious.

Devereux suggests that interventions to address this fundamental vulnerability could include more support to farmers, specifically, renewed research into high-yielding and drought-tolerant crops to stabilise yields, and subsidised access to agricultural inputs and credit to boost yields.

Africa needs to support smallholder farmers to increase food output
‘In this context, the recent reintroduction by governments in Malawi and elsewhere of fertiliser and seed subsidies, usually against donor advice, is an encouraging indicator of renewed public commitment to small farmers,’ he noted.

According to FAO, African governments need to prioritise and implement measures to develop agriculture and sustainable natural resources management to ensure food security for their people. ‘The ‘business as usual’ approach to the climate change problem will not reduce the vulnerability as this vulnerability is exacerbated by existing developmental challenges such as endemic poverty, complex institutional dimensions; limited access to capital, infrastructure and technology; ecosystem degradation; and complex natural disasters and conflicts,’ the organisation said in a paper to its May 2010 regional conference held in Angola.

The FAO report recognised that climate change jeopardises the economic progress achieved by Africa to date ‘due to the substantial diversion of resources required to fund adaptation initiatives. Estimates predict economic losses as a result of climate change as up to 14 per cent of GDP if adaptation measures fail to be implemented.’

Economic liberalisation policies across Africa effectively removed several pillars of food security support for the poor, such as price subsidies or open market operations by agricultural marketing parastatals to stabilise food prices. As a consequence, Devereux has argued, poor food purchasers have no protection against unregulated markets, which can result in staple food prices quadrupling or more within a few months. In the cases of the famines in Malawi and Niger, analysts argued that unaffordable food prices were the main driver of the famine.

Chipeta is more scathing, calling market liberalisation by African governments ‘irresponsible’. ‘ Africa has deregulated trade irresponsibly, opened up to imports even from heavily subsidising countries... Its local products cannot compete even in domestic markets – no other region has been so generous in trade concessions,’ he said, adding that structural adjustment led to the withdrawal of government support for agriculture precipitously, and downsized public sector institutions excessively.

Experts have recommended that weak commodity markets be strengthened or regulated, to protect the market-dependent poor against food price shocks. Devereux and Chipeta agree that building rural infrastructure - especially roads, transport and communications networks - is a prerequisite for integrating rural markets and equilibrating food supply and demand across surplus and deficit areas.

‘Rural investment is too low. There’s severe lack of infrastructure; for example, Africa is at India’s 1950s road density level, and on water use, Africa uses only 4 per cent available for farming in comparison to Asia’s 40 per cent. On fertilisers, Africa is at about 9kg per hectare, OECD countries are at 125kg, whilst East Asia is at about 250kg,’ Chipeta remarked.

Key proposals to address the reality of weak markets include allowing public intervention to correct for market failures. Devereux favours the inclusion of ‘effective management of national or regional grain reserves to stabilise staple food prices - buying grain at low post-harvest prices, storing it and releasing it at cost plus storage costs before the next harvest to dampen ‘hungry season’ price inflation’. On the other hand, farmers also need to be assured of reasonable prices for their produce, to boost smallholder incomes and ensure adequate food supplies.

In recent years, several studies have demonstrated a low correlation between levels of humanitarian need and levels of humanitarian response, and identified the strategic interests of donors as the main determinant of how much attention particular crises receive. The recent famines in Africa were all predicted by various early warning systems but these were ignored, emphasising the need for all sources of information to be treated seriously whilst recognising the potential for misinformation by interested parties.

In response to the goal to eradicate hunger, the African Union, through its Nepad programme, took up the challenge to increase both the amount and quality of food produced on the continent and, by doing so, ‘make families more food-secure, exports more profitable, and improve social and political stability’. It is from this ambitious aim that the Comprehensive Africa Agriculture Development Programme (CAADP) was born in 2003. CAADP’s mission is to address policy and capacity issues across the entire agricultural sector and the African continent, and among its key targets is the achievement of agricultural growth rates of at least 6 per cent per annum.

However, it was not until 2007 that the first country, Rwanda, signed the CAADP Compact. By May 2011, 26 countries had incorporated CAADP into their agricultural strategy by signing the CAADP Compact. Without being overly uncharitable, CAADP is yet to make its mark and the fact of its slow endorsement by African countries is sufficient evidence of its effectiveness thus far in the struggle to eliminate extreme hunger in Africa by 2015.

Chipeta has urged Africa to swiftly move beyond adopting declarations and commitments to implementing them and calls for the continent to increase public support for agriculture. ‘Pious hopes are that external partners – and not Africa itself - will fund the Africa-led Nepad [but] the evidence is not encouraging,’ he said.

‘The bottom line is that Africa must urgently boost production and productivity to levels exceeding population growth rate … There is need to reverse much current public policy [and the] key is greater public investment to first create conditions attractive to serious private capital,’ he urged. African governments are encouraged to invest in domestic production rather than buy from the international market when prices are low because they do not have the resources to subsist on cash purchases, food prices will not remain low in future, and food is a national security issue able to threaten political freedom, Chipeta said.

Africa must be wary of argument that when international food prices are low it should buy food rather than invest in domestic production because prices it does not have the money, prices will not remain low, and food is a national security issue able to threaten political freedom.

There is strong currency in the argument that Africa has grown complacent from decades of receiving food relief and must stop acting as if food aid is a right and is a sustainable solution. Development experts say Africa needs to become self-confident about domestic production and follow it up with substantial investment of its own resources. Several countries have begun moving towards CAAPD’s goal to increase their investment in agriculture in relation to their GDP.

A crucial part of this strategy, experts say, is to make farming both competitive and rewarding. Governments are urged to make inputs available and affordable, and ensure protection of local products from unfair competition of subsidised imports by watching inequitable trade and partnership agreements.

With climate change projected to compound Africa’s precarious food security situation, nothing short of durable solutions is required to ensure the elimination of extreme poverty on the continent. According to Ban Ki-Moon, ‘It means climate-smart crop production, livestock rearing, fish farming and forest maintenance practices that enable all people to have year-round access to the nutrition they need’.

Thursday, 4 August 2011

Bingu waMutharika: uneasy lies the head that wears the crown


Angry Malawians took to the streets on July 20 to protest at the rising cost of living and increasing government repression


MALAWI’s President Bingu wa Mutharika is a man under siege. Only a few weeks out of a costly diplomatic standoff with Britain in which the latter swiftly effected a freeze on crucial aid to the country, the beleaguered president faced vicious riots at home in the last half of July as Malawians vented their frustration with the high cost of living and shrinking civil liberties.

The riots of 20 July, which rocked the capital Lilongwe and the northern city of Muzu as hordes of protesters set up barricades whilst some looted shops, exploded from a tinderbox of economic and political frustrations that have been brewing in this characteristically stable country for a while now. According to Malawian historian Paul T. Zeleza, the immediate causes of the growing popular disaffection include the government’s growing authoritarianism and arbitrary power as reflected in the passage of harsh laws against civil liberties, and worsening economic mismanagement as manifested in shortages of fuel and foreign exchange, power outages, rising unemployment and inflation.

Zeleza also said Malawians were angry at Mutharika’s dangerous mobilisation of ethnicity as evident in the redistribution of jobs in the public sector to favour people from his ethnic group. The president has also railroaded his Democratic Progressive Party (DPP) to endorse his brother Peter, a former law professor in the US, as the party’s candidate in the presidential succession after Mutharika’s second term ends in 2014.

Often accused of ineptitude in controlling crowds and using disproportionate force to break up demonstrations, Malawi’s police force went for overkill – literally – in their efforts to disperse protesters over the two days of rioting. Although human rights activists concede that there were pockets of violent rioters armed with stones, they blamed the police’s use of excessive force for the deaths of at least 19 people.

Analysts say the government provoked an already tense situation by applying for an injunction to prevent protests the night before they were scheduled, leaving organisers with the impossible task of conveying the message to all participants. When the riots broke out the following day – 20 July – the government used its court injunction to declare the strikes illegal and thus legitimise its heavy-handed response.

On Thursday 21 July the Human Rights Consultative Committee (HRCC), organisers of the demonstrations, took out a public service announcement urging a stop to further protests. They said only Wednesday 20 July was the legitimate date for demonstrations, and a petition had been delivered to the president to that effect. Any further protests after that date were illegal. The president accused the protesters of committing treason warning, ‘If you go back to the streets, I will smoke you out. Enough is enough’

Man under siege: President waMutharika

Mutharika’s response to his countrymen’s growing disaffection with the economic hardships is that it was the IMF that had ordered the government to liberalise oil importation and the foreign exchange system, and leave them in the hands of the private sector. But there is widespread belief that Mutharika’s government is itself extravagant and refuses to accept self-sacrifice and austerity measures on itself to cut expenditure.

When Mutharika came to power in 2004 Malawi was experiencing serious food shortages which by 2005 had become a full-blown famine. As he had promised during his presidential campaign, once elected, he defied donors by implementing the most generous subsidy programme Malawian farmers had ever seen - the $74m Farm Input Subsidy Programme (FISP). Under the scheme, the government doled out bags of fertiliser and hybrid seed to maize farmers, with the budgeted subsidy increasing year by year.

The subsidy programme has been hailed as a regional success story. It has also earned Mutharika electoral capital as it has favoured small farmers, pulling many of them out of chronic food insecurity and saving the country money on its imports bill. In four years, maize production doubled and national food self-sufficiency increased substantially. Donor concerns with the programme’s sustainability centred on the increasing amount of gross domestic product that it is taking up and the volatility of both maize and fertiliser prices, as well as recurrent droughts. However, despite their initial opposition and lingering reservations, donor countries - including the UK and Norway – gave their support.

However, all this has now changed drastically following Mutharika’s expensive confrontation with Britain as well as the fallout from the recent riots. In April this year the Malawian government expelled the British High Commissioner in the country, Fergus Cochrane-Dyet after Cochrane-Dyet angered the Malawi government by describing Mutharika as ‘a combative president’ who is increasingly becoming ‘autocratic and intolerant of criticism’ in a leaked memo.

‘The governance situation continues to deteriorate in terms of media freedom, freedom of speech and minority rights,’ the British envoy said in a leaked cable which had been sent to Foreign Secretary William Hague. In retaliation for what he called the ‘totally unacceptable and unwarranted’ expulsion of the British envoy, Hague also expelled Malawi’s acting High Commissioner and her dependents from London.

‘It is a worrying sign that the Malawian Government is expending its energies in this way, rather than focussing on the real and substantial challenges facing it, including the need for improved governance,’ Hague said, announcing the Malawian envoy’s expulsion. He said he had also ordered officials ‘to review rapidly the full range of our wider relationship with Malawi’. Britain announced a month later that it was freezing aid worth $550 million over the next four years as a result of the diplomatic fallout. In June, it froze its financial support for Malawi’s fertiliser and seed programme.


It has been a rough year for Mutharika. In March, the country lost more than $400 million in aid money when donors, including Germany, Norway, the World Bank, African Development Bank, and the European Union, suspended or ended their budget support. Britain, Malawi’s former colonial master and the country’s biggest donor, $31m in budget support for 2011.

The latest round of aid freezes has come courtesy of the government’s murderous response to the recent riots. The American aid agency Millennium Challenge Corporation (MCC) on July 16 unleashed its own body blow to Malawi’s depleted coffers by freezing its $350m accord with the troubled country. Up to 40 per cent of Malawi’s national budget comes from foreign aid.

Malawian officials have remained silent over the latest round of aid suspensions, AFP reported, adding that the silence of senior officials on the issue of MCC’s pullout says much about the prevailing political condition in the current administration. ‘Under Mutharika’s tightly controlled administration, ministers rarely dare speak out until the president himself has commented,’ the agency added. Malawi has an entrenched tradition of strong presidential rule as established by Mutharika’s two predecessors, founding father Hastings Kamuzu Banda and recent past leader Bakili Muluzi.
The Malawian media has laid into Mutharika for costing the country critical support from donors, with the Daily Times newspaper saying in its editorial that Malawi ‘needs every penny its partners pledge to help… This is particularly so now when the country’s economy is teetering on the brink of collapse under the heavy burden of the twin fuel and forex shortages and electricity outgages. Good leaders are discerning and read the writing on the wall and then do the needful,’ the newspaper added.
Defiantly, Malawi passed a ‘zero deficit’ budget in June which proposes to finance all public recurrent expenditure using its own domestic resources without any recourse to either domestic or foreign borrowing or cuts in public service delivery. The jury is still out on just how Mutharika intends to plug the foreign aid gap in his coffers.

Serving his last term, which expires in 2014, Mutharika is not in danger of being ousted from office. Spirited though the riots were, it is not likely that a resurgence of popular anger will drive him out of power before his due date. The country’s civil society activists have been shaken by the state’s violent response to their protests, with some of their leaders having gone into hiding after Mutharika’s seething accusations of treason against them.

The Institute of Security Studies in Pretoria, South Africa, says Malawi’s opposition parties have not been able to garner significant national support to effectively challenge the government. ‘While they may be able to boost their positions relative to the ruling party by forming coalitions, many opposition leaders are unwilling to accept an inferior position in an opposition,’ the Institute said, adding that there was also an overall sense of disenchantment with the all parties in the political arena, who are perceived as being distant and unresponsive to the concerns of voters, beset by a lack of accountability and transparency and lacking democratic credentials between and within parties’ internal structures and practices.

The Vice President, Joyce Banda, who Mutharika fired from the DPP last year but remains in her government job owing to Malawi’s constitution, has just formed a new party called the People’s Party with the support of DPP defectors. She had previously been touted as a possible successor to the 77-year old president and it remains to be seen what impact she will have on voters in the coming months.

Thursday, 24 February 2011

Frontline Club discussion on Zimbabwe in 2011

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Zimbabwe's leaders have been locked in a shaky power sharing coalition since opposition leader Morgan Tsvangiraiwas sworn in as Prime Minister in January 2009. This agreement followed a period of violence and turmoil after the 2008 elections, which Robert Mugabe is widely believed to have stolen.
President Mugabe is now pressing for fresh elections in 2011, despite MDC leader Tsvangirai saying that they could not take place without reforms and constitutional review.
Analysts fear that Zimbabwe could be marred by violence in a repeat of 2008, when Mugabe lost the popular vote, but forced a win in a runoff election. With the military, police and state apparatus on his side there is little chance thatMugabe would allow a remotely free or fair election would likely ensure his removal from power.
Join us at the Frontline Club with a panel of experts to discuss what the coming year holds for Zimbabwe - could there be a fair election, or will violence and intimidation again escalate?
Chaired by Gerry Jackson, founder of SW Radio Africa - the independent Zimbabwean radio station that broadcasts to Zimbabwe on shortwave and worldwide via the internet. She has been reporting on Zimbabwe for over 25 years.
With:
Geoff Hill, bureau chief in Johannesburg for The Washington Times and author of The Battle for Zimbabwe and What Happens After Mugabe?;
Chofamba Innocent Sithole, Zimbabwean journalist and community organiser;
Blessing-Miles Tendi, author of Making History in Mugabe's Zimbabwe: Politics, Intellectuals and the Media;
George Shire, cultural theorist, political analyst and reviews editor for "Soundings", a journal of politics and culture