Categories
Economy

TradeMark East Africa (TMEA) REQUEST FOR PROPOSALS (RFP) FOR CONSULTANCIES SERVICES

ADVERTISEMENTS

REQUEST FOR PROPOSALS (RFP) FOR CONSULTANCIES SERVICES

Screen Shot 2015-10-19 at 01.15.02

KENYA PORTS AUTHORITY                      

TradeMark East Africa (TMEA) seeks bids from qualified service providers for various assignments stated below to the benefit of the Government of Kenya represented by the Kenya Ports Authority;

  1. PRQ20150106 – Consultancy Services to review the current plans by KPA, KRC,RVR and KeNHA for the Development of a Modern Rail Freight Logistics Corridor and Hub to serve Nairobi, for both Intermodal and bulk freight sectors, and to advise on the Strategy for creating the most efficient and low cost freight logistics chain between the Port Of Mombasa and Nairobi;
  2. PRQ20150261 – Consultancy Services for Options Study for the development, operation and maintenance of a Modern Integrated Truck Marshalling Yard in Mombasa;
  3. PRQ20150150 – Consulting Services for Gender Mainstreaming at the Port of Mombasa;
  4. PRQ20150171 – Consulting services to study the energy needs, alternative energy sources and provision of shore power (Cold Ironing) for the Mombasa Port.

The Tender documents for the above consultancies can be obtained from TMEA’s website at http://www.trademarkea.com/get-involved/procurement/ and any query quoting the above Tender Titles and Numbers should be directed to [email protected] ONLY. Any email query with attachments must be no more than 5MB.

The submission deadline shall be Monday, 16th November 2015, 11am Kenya local time. .

 TMEA

TMEA cannot answer any query relating to this tender 7 days or less prior to the submission deadline.

Categories
Economy

Nigeria’s economy: a tough road ahead

When Nigeria’s new President, Muhammadu Buhari assumed office on 29th May  of this year, it was amid a torrent of concern over the economy’s prospects. Partly due to alleged mismanagement by the outgoing administration of Goodluck Jonathan, 2015 is turning out to be a tough one for African economies.

The slowdown in China and nose dive of oil prices has hit hydrocarbon exporters such as Nigeria particularly hard. Despite repeated efforts by the Central Bank of Nigeria (CBN) to shore up the national currency, the naira, it has remained volatile, and dropped to a record low against the dollar earlier this year.

Add to that the perennial issue of corruption, which affects every aspect of the Nigerian economy, but is of particular concern in the oil industry, the incoming President has got his work cut out for him.

Addressing such myriad issues will take time, but there are signs that this administration will do things differently.

For one, the President made a point of scheduling a state visit to the US in July to shore up and restore confidence in Nigeria, which remains a top destination in Africa for foreign investors. Relations had become somewhat frosty under President Goodluck Jonathan.

Along with a warm welcome by President Obama, the occasion was used as an opportunity to engage the American business community. It seemed to work, as just a month later Stephen Schwarzman, founder of the global private equity firm, Blackstone Group, visited Abuja with a team of executives. US companies are ramping up their investments on the continent, and look set to become a major source of foreign investment in the coming years.

Another, indirect, sign of a different tone in economic leadership came in early September, when both President Buhari and his Vice President Yemi Osinbajo officially declared their assets. Unusual in its own right, it was the modest nature of the wealth declared by the President which made headlines.

According to a statement by his senior special assistant, media and publicity, Garba Shehu, some of Buhari’s assets include a ranch with 270 herds of cattle, two mud houses, and N30m ($150,000) in his only bank account. The statement adds that he does not own a single oil well or operate foreign bank accounts. Buhari’s modest net worth did not come as a surprise to many Nigerians, as he is known to be frugal.

Perhaps the most indicative step taken by the President to date has been his crackdown on the Nigerian National Petroleum Company (NNPC), an institution which has become synonymous with corruption in the country.

In early August, he fired and replaced its managing director and all its executive directors in a clear signal that he intends to take a harsh stance on corruption.

Such steps are undoubtedly encouraging, though he has faced some criticism, including his decision to delay the appointment of a cabinet until September.

Rasheed Adegbenro, an economic policy analyst and former acting director-general of the Manufacturers Association of Nigeria (MAN), believes the president is on the right track. 

“The first few months have demonstrated that President Buhari would keep to his campaign promise to offer Nigeria the leadership required to turn around the economy. The public sector institutions have suddenly woken from their slumber and performance has improved.

“In spite of the fact that no new investment has been made in the power sector, appreciable improvement has been recorded in electricity supply. Notwithstanding the slow pace in governance, the larger society is prepared to go along with the new administration because hope is high that tangible results would come.”

Adegbenro, who is currently the senior vice president, strategy and development of the Centre for Values in Leadership (CVL), a socio-economic think-tank based in Lagos, adds that a major lesson that can be learnt from Buhari’s seeming delay in the appointment of ministers is that the government machinery can run quite well without politicians as ministers. He says this strengthens the perception that technocrats in the public service run ministries more efficiently than politicians.

He said: “The absence of cabinet ministers has not affected the perception of the international community concerning governance structures in Nigeria. Rather it has demonstrated that the new leadership is not prepared to sacrifice integrity on the altar of political interest.

“This is good for the economy that needs a better reputation.”

Contrary to criticisms of the current administration’s handling of the economy, Adegbenro believes falling oil prices and fluctuation of the value of the naira to the dollar are predictable, due to excessive reliance on oil as the major source of government revenue and the reliance of the economy on imports.

He added: “The ‘no business as usual’ stance of the Buhari administration is a plus point for Nigeria’s brand equity in the search of fresh inflow of foreign direct investment.”

New economic blueprint

However, there is still much work to be done. The slump in oil prices, which dropped to $42 per barrel, has necessitated adjustments in budget benchmarking. It is anticipated that prices will drop even further when Iran resumes supply of oil, following the lifting of sanctions.  Oil exports account for 70% of government revenue.

Though the government had taken steps to mitigate the impact of this drop, by devaluing the naira, first in November 2014, and also in February this year, the economy has yet to come out of the woods. As part of measures to strengthen the naira, the Central Bank has announced a temporary ban on local transactions in dollars.

The government also recently unveiled a new economic blueprint that could potentially lead to the creation of 1.14m jobs, increased annual food production by about 530,000 metric tonnes, and attracting new investments of up to N980bn ($5bn). It is expected that all these new policy measures would help to reflate the economy.

It is still early days for the Buhari government, and much work remains to be done, but there are clear signs that change may be on the cards.

Frederick Mordi

Categories
Energy & Resources

Biogas backpacks: the future of African energy?

woman walking with a nearly 2-metre-wide, pillow-shaped inflatable blue bag on her back tends to get the locals looking in the Ethiopian capital, Addis Ababa, followed by the obvious question: What on earth is that?

Biogas, is the answer. (B)energy is a Germany-based social business that offers low-tech, low-cost mobile biogas solutions through local franchisees to customers all over the world. Its (B)pack (that plastic bag carried on the back) is filled with biogas from a special mobile biogas digester – a sealed compost bag – after which the biogas-filled (B)pack can be carried to a home where it is hooked up to a biogas cooking stove.

GE_Reports SSA_Manufacturing_480x320

German founder Katrin Puetz, 34, has built the company’s business model on the idea of empowering local franchisees to sell mobile biogas technology on themselves. This turns these biogas producers into so-called (B)entrepreneurs, in the words of Puetz, as each gains an income while promoting clean, affordable and sustainable energy.

One such (B)entrepreneur is 32-year-old Zenebech Alemayehu, a single mother with a nine-year-old son, and a recent convert to (B)energy, based in a southern suburb of Addis Ababa.

“I sacrificed a lot for this,” Zenebech says inside a large ramshackle shed as a struck match is held to the end of a metal pipe and a faint blue flame springs into life. “When I see it working I am so happy and more motivated.” She puts her finger tips to her lips then toward the flame, a symbolic kiss for her new biogas-inspired business.

The pipe leads outside the shed connecting with a 5-metre-long plastic tank – the digester – that takes anything from waste food to goats’ droppings or those of a larger human form; Zenebech keeps hers supplied from a giant pile of cow dung inside the shed.

Initially, Zenebech is using the biogas to cook snacks to sell to employees at a police station next door. Using the proceeds she plans to purchase a number of (B)energy’s (B)packs – each holding about 1 cubic metre of biogas, enough for about three to four hours of cooking – enabling her to expand her business among local homesteads.

No charity

Puetz began the project that led to her business while working for Hohenheim University in Stuttgart, where she realised its potential in Africa as a clean, cheap alternative to cooking on smoky, polluting fires.

After being contacted by Addis Ababa University and invited to move to Ethiopia to develop the technology, she launched (B)energy in April last year. She remains determined her enterprise remains self-sufficient, despite her technology being a prime candidate for tempting funding – she has already turned down grants from global charities.

“If I take a grant and use that to sell biogas technology more cheaply than competitors, that distorts the market whereby everyone else is finished as they cannot compete,” Puetz explains.

“My aim is not to just provide biogas but to show it can be provided without aid. This is not just about money; it is about pride – why do we always have to have aid and subsidies for something that can work on its own?”

Puetz’s business model and philosophy has already persuaded a franchisee in Khartoum, the capital of Sudan.

“It is environmentally friendly, creates entrepreneurs and strengthens communities without charity,” Waleed Babiker says of why he decided to sign on, coming to Addis Ababa in May this year to meet with Puetz and finalise the paperwork. “If you give energy to rural areas they can do a lot with it and develop themselves.”

Babiker originally achieved business success through a chain of eight restaurants in Sudan, and wants to give back to society, especially outside Khartoum where rural households struggle to obtain affordable cooking gas.

“Even if you are a business person you do not just live your life for money; you want to do some good,” Babiker says, emphasising how cooking with biogas can also mitigate problems that go with more traditional methods. In the western Sudan region of Darfur, for example, collecting firewood exposes women to frequent rape, he says. And globally, smoke inhalation from cooking and heating with solid fuels kills about two million people every year – primarily women and children – according to the World Health Organisation.

Flickering flame

Biogas was introduced by NGOs as far back as 50 years ago,” says Araya Asfaw, director of the Horn of Africa Regional Environment Centre and Network (HOAREC), based at Addis Ababa University, and which partnered with Puetz to test (B)energy’s technology.

But, Araya explains, too often NGOs built digesters without adequate promotion: “So either people did not know about biogas or were not interested – it was donor driven rather than demand driven.” Also, he notes, NGO programmes installing digesters in every household failed because people could not manage the maintenance and effort required. (B)energy, on the other hand, opts for dissemination of its technology through multiple (B)packs supplied by a single digester, which is also more practical and cost effective.

While (B)energy is flexible regarding payments, willing to initially loan equipment to kick-start businesses, the (B)pack is no freebie.

GE Reports Africa Energy

“When you give something for free people do not value it; it may end up under the bed,” says Eyobel Gebresenbet, a HOAREC project officer advising Zenebech. “But make them pay and they then want the training, and use it properly.”

At the start of 2014, a pilot project in the town of Arsi Negele, 275km south of Addis Ababa, demonstrated the need and popularity of biogas in backpacks. By the project’s completion, 26 households were regularly buying (B)packs.

“Now we are trying to establish production to make equipment for all of Africa,” says 35-year-old Wubshet Yilak, the franchisee for (B)energy Ethiopia. “In addition to the franchisee in Sudan we’ve been contacted by someone in Nigeria who wants to introduce the technology.”

One of the main challenges, Wubshet acknowledges, will be convincing local Ethiopians to pay about 12,000 Ethiopian birr ($600) for equipment – two (B)packs, one digester, one biogas cooker – although the hope is to make such cost more feasible by using micro-financing.

“My family were farmers with 15 cows and we cooked using wood and cow dung,” Wubshet says. “I know the problems of this type of cooking, I think of my neighbours – that is why I want change, so we can have clean energy.”

Bureaucratic hurdles

For nearly two years (B)energy Ethiopia has found itself bouncing between governmental departments seeking a licence – up to now there is no precedent for biogas within Ethiopia’s private sector. Very recently the technology was tested by the Ethiopian Conformity Assessment Enterprise and now awaits further steps taken by the responsible ministry to facilitate permission for this new biogas technology to become fully operational.

“My franchisees have finally moved a big step ahead with getting the backpack tested,” Puetz says. “Now there is new hope for (B)energy Ethiopia, but if a licence isn’t granted soon the chance for Ethiopia to be the first country that uses and produces this technology locally will pass.”

Whether bureaucratic hurdles might be influenced by this private sector endeavour being considered a competitor to Ethiopia’s foreign donor-funded National Biogas Programme – and the millions of euros pumped into it – is open to speculation.

Another challenge is whether (B)packs can work in urban settings.

“In the rural areas you have plenty of room, but it will be harder in the cities,” Araya says. “The system is too bulky.”

But those like Zenebech are not deterred. She previously worked washing clothes and cleaning buildings on construction sites, and is determined to be her own boss as she pushes forward her fledgling business plan.

An agreement secured with a nearby dairy farm will enable her to collect free cow dung to resupply her digester. She also plans to sell the digester’s by-product – good-quality organic fertiliser – to local seedling growers.

Up to the elbow in slurry as she mixes cow dung with water and removes any grass – to optimise the digester process – Zenebech admits she would welcome some form of filtration system becoming available.

“But if not I can carry on,” she says. “I have done harder labour than this.”

Such personal enthusiasm for this technology may be (B)energy’s greatest asset in overcoming the continuing challenges for a company that is a small fish with a big idea in an even bigger pond.

“Anyone who has used the system has become a promoter,” Wubshet says of (B)energy’s popularity with users during the pilot project, and those who have come since. “We want to give a chance to every corner of Ethiopia.” 

Categories
Economy

October 2015

Categories
Economy

Mbeki: Dealing with illicit financial flows ‘in West’s interest’

Former South African President Thabo Mbeki is chairman of the High-Level Panel on Illicit Financial Flows from Africa, created by UNECA and the AU. During the Third International Conference on Financing for Development in Addis Ababa, Thabo Mbeki spoke to African Business.

AB: Why do you think the issue of illicit financial flows (IFFs) has taken so long to attract mainstream attention?

Thabo Mbeki: Part of the reason has just been a matter of knowledge, then acquaintance with this subject, and recognition of the fact that there is a problem.

A challenge of this kind takes time. Our panel was set up by African finance ministers, because they saw and identified that there was a problem and a challenge. But they didn’t know enough about it to answer all the questions raised about what was to be done, so we decided to set up the panel. There was consensus with the Economic Commission for Africa to do so.

Our objective is for we ourselves, even ministers of finance, to get a better understanding of what this phenomenon is. So it has really been a problem of understanding and of education on the continent. But I think now we have got to the stage where people have recognised right across the continent that it is a challenge that has to be addressed.

I think, globally, what has helped in this regard is that the major Western countries found that this is their problem as well, because they discovered that many big multinational companies based in their own countries take a lot of the profit made in Africa into tax havens.

So you have billions of dollars that do not come back to the US or the UK or other places. Finally, Western governments now realise that it is in their own interests that this question must be dealt with, so there is a coincidence time-wise that you get this matter raised at the G8 and at the G20 meetings. Then it is vocalised that we must do something about these companies evading tax.

These matters also come up in the European Parliament – it’s decided that international companies must now report country by country.

They were addressing these challenges, which ultimately face their own economies. Be clear – they were not addressing these things to help us, but primarily to help themselves – but, as I said, time-wise the focus then coincided with these issues.

So by the time we, as an African panel, go to them and say ‘Here is a problem we are facing as Africans and we think this is what needs to be done’, you find people who have got their ears open to the issues. That’s because they are faced with the same challenge, so it becomes easier to internationalise the focus and respond to the issue.

AB: There is no precise target for reducing IFFs – probably one reason being that there are no real metrics. Would you share the analysis that this is a key problem that needs to be addressed?

TB: Yes, I think it would be premature to say let us reduce illicit outflows by 50% by 2030, because even if you take the figure we have used of $50bn that Africa loses every year, that is actually a partial reflection of the loss, because that figure reflects misinvoicing. What it reflects is the amount of money that the continent loses as companies overinvoice what they import into a country, and then underinvoice what they export.

This is only one form that the illicit outflows take. There are other forms, transfer pricing, for instance, which is when one of these big companies trades within itself. For example, a mining company in South Africa sets up a service company in Bermuda. It buys services from what appears to be an independent company and, of course, it overcharges them. So when they export foreign capital from South Africa, in fact it’s their own subsidiary. But the $50bn does not cover that. The reason we went that route is because we wanted to be accurate in the figures we cite.

Both the IMF and the UN maintain particular sets of statistics about trade. The data is there to calculate this misinvoicing – the data isn’t there to calculate other forms, however. So if you said ‘Now let’s make sure that in the 15 years of the sustainable development goals that are to be agreed later this year, we will cut illicit outflows in Africa by 50%, which means we come down from $50bn to $25bn’, that won’t be truthful or even possible, simply because there are so many other forms that illicit outflows take which are not covered by this $50bn, because the way of calculating them is not precise. So we said ‘Let’s use figures that we can actually substantiate with real data’.

AB: Where have you had your greatest achievement or encouragement in your crusade against IFFs thus far?

TB: I think the first and major achievement is that now, for the first time, we have a programme to deal with illicit financial outflows that emanate from the continent and that is approved across Africa.

When the summit meeting of the African Union looked at the report and agreed it, the AU then passed its own declaration of what was to be done. Now they know what to do, the report is there, and the whole continent has reached major consensus. I think that’s a major achievement.

The second achievement is that the matter of the illicit financial outflows serves as one of the principal items on the agenda of this international conference Financing for Development. In the end, we might be the originating countries in terms of outflows, but there are destination countries, and we need to act together with them.

So they are here as part of the Financing for Development conference, and the draft documents that are with them include illicit financial outflows as a major topic.

I think those are two achievements. I am sure the conference will adopt a document which reflects and takes into account the illicit financial outflows issue.

It’s the first time for Africa to construct a programme which is continent-wide – and also it will be the first time that it will be possible to construct a programme on the illicit outflows which can also be global. This is a major basis on which to move forward, and I think the really big challenge will be for us to say ‘We have gone so far, let’s get the results’.

Clearly, the issue has now been analysed properly, it’s been discussed in detail. The forms that it takes, and the ways and means in which the outflows take place, have been identified. You actually do have examples around the world of responses that have been made already. So in some of the instances, you don’t have to re-invent the wheel, you have got to say ‘Look, here is something that has been done, implemented and worked effectively. Why don’t we globalise it?’.

At the Financing for Development conference and beyond, what we have to focus on is implementation of these measures, so that we actually get real results, in terms of stopping the outflows and – more importantly – returning what has already left.      

Darren Moore

Categories
Economy

Buhari: Baba Go Slow or Baba Deep Clean?

Nigerian president Muhammadu Buhari’s All Progressives Congress (APC) won historic elections in March and April this year with a simple message of change. Nigeria was in a tight spot – oil prices had crashed, the electoral cycle had brought much business to a standstill, corruption remained a constant, and, despite recent successes against the militants, Boko Haram remained a serious security threat. The electorate overwhelmingly decided that the APC’s new broom (the party’s logo) was needed.

What form this change would take and how deep the clean would be was unclear. Buhari’s campaign was slick, with consistent messaging. His head of policy, the cerebral former governor of Ekiti State, Kayode Fayemi, produced an ambitious manifesto, presenting the APC as a programmatic social democratic party. In election rallies and private briefings, APC bigwigs discussed the growth of a welfare state, development of the power sector, substantial reforms of the oil and gas sector, and plugging the leakages – or structural theft and corruption – that holds Nigeria back.

Policies, Mr President?

In the campaign, the APC suggested that Buhari’s administration would be policy focused, with the president setting the direction but with influential ministers charged with accomplishing key objectives. Buhari would be a chairperson, rather than CEO president, several well-placed analysts suggested.

Four months into his administration, how wrong these projections seem. By the time of going to press, the president has still not appointed a cabinet of ministers. 

Despite claims by the presidency and his supporters, not having any ministers for the first four months of an administration is not normal. It isn’t what partners hoped and expected. Buhari has at his disposal some highly qualified politicians and technocrats that could have made up – and could yet make up – his core team. In the critical areas of fiscal policy, infrastructure development, welfare and service provisioning, and the exchange rate, much less than expected has begun.

When Buhari was elected, the naira had been on the slide since the price of oil started to drop dramatically in October 2014. The currency weakened from 165 to 199 to the dollar on the official exchange. When Buhari ruled Nigeria in the 1980s, he railed against IMF demands to devalue the currency and has consistently argued that devaluation in Nigeria would be bad for the economy. Nigeria’s main export, oil, is priced in dollars, so a cheaper naira wouldn’t make Nigeria’s oil more competitive. Nigeria imports many of the finished products it needs, most of its fuel, and many of the inputs necessary for the oil and the small but growing manufacturing sectors. A weaker naira makes these more expensive.

On the eve of the election, Fayemi confirmed to African Business that shoring up the naira would be a priority. Buhari’s victory did coincide with a small decrease in the informal market cost of dollars and a strengthening of the naira on synthetic futures markets.

Fayemi told African Business that it would be active government policy that would manage the naira and that the Central Bank of Nigeria (CBN) would play a reduced role. Under Jonathan, CBN governor Lamido Sanusi expanded the remit of the bank. Fayemi said that Sanusi’s successor, Godwin Emefiele, would have his wings clipped.

Quite the reverse has happened. The minister-less Buhari administration has done little and Emefiele has taken an even more activist role than Sanusi, blocking access to foreign exchange for the import of an increasingly broad array of products.

This CBN-led strategy is keeping a lid on things for now; the official rate is 197 to the dollar. But, signs of pressure abound. The informal market rate is over 220. Speculators playing the 12 month non-deliverable forwards market – a way for speculators to bet on the price of the naira without buying or selling any real ones – believe that by September 2016, the naira will be over 260 against the dollar. This price is up from 231 in the early April days after Buhari’s victory was announced, but down from a high of 285, just after elections was postponed in early February.

Cleaning out the stables?

This lack of press-releasable action from the administration has earned Buhari the nickname “Baba Go Slow”. Apparently, those who expected policy rollouts and action on slowing economic growth are disappointed.

However, there is some evidence that Buhari is rebuilding the deeply flawed systems and structures that govern Nigeria before attempting to implement the manifesto he ran on. Buhari sacked the entire board of the theft-ridden and opaque Nigerian National Petroleum Corporation (NNPC). He started an investigation into export and complex swaps
contracts that developed over previous administrations. In August, he appointed Emmanuel Ibe Kachikwu, a senior ExxonMobil oil man, to run NNPC. The new boss immediately signalled that the NNPC’s internal culture would be revolutionised and made much more transparent. It continues to be rumoured that Buhari will not hand over the oil ministry to a minister but will keep some control of it for himself. The previous oil minister, Diezani Alison-Madueke was seen to build up too much power in her five years in charge of the sector that produces over 70% of
Nigeria’s government revenue.

Buhari has effected a similar clear-out of military top brass, reshuffling the entire top team. The president has taken a methodical approach to security reform, even in the face of an estimated 800 deaths at the hands of Boko Haram in the first 100 days of his presidency. He has realised that to defeat Boko Haram requires deeper regional coordination with the other three countries affected by the Islamist insurgency: Cameroon, Chad, Niger. He has visited each country since his inauguration and hosted the presidents of Chad, Niger and Benin, along with the Cameroonian defence minister in Abuja to finish putting together the Multinational Joint Task Force made up of the five countries’ forces that will fight Boko Haram.

It appears that Buhari’s approach to tackling corruption is much more root and branch than he suggested it would be on the campaign trail. Not only does the president seem more than happy to allow investigations into corrupt practices that took place before he entered office, but he has consistently placed anti-corruption over the smooth running of government or the economy.

In September, Emefiele sought to calm banks’ fears about liquidity shortages, as the interbank lending rate jumped 200% after Buhari ordered the consolidation of all ministry accounts into a single account at the CBN. Buhari instituted the policy to create greater oversight over ministry funds and prevent departments from running multiple bank accounts, making corruption easier to hide. This policy hit banks’ liquidity ratios.

Likewise, his non-appointment of ministers, while candidates’ corruption track records are thoroughly investigated, has hurt confidence and slowed government action. But, it has clipped the wings of ministers. In an interview with French television during September’s state visit, Buhari was dismissive about ministers and politicians, in general, saying that they make “noise” but don’t do the work. This disdain for politicians will be recognisable to those who lived through or have studied Buhari’s first period in power as a military ruler.

There is, of course, another reason Buhari could want to delay appointments and limit ministerial purviews – politics. Nigeria suffers from a politics of zoning, where competing forces try to get “their” candidate into a position. Not only does this breed politics that contends not on ideas but along factional, regional and ethno-linguistic lines, it also creates incentives for corruption. Payback is strongly implied. Not only must Buhari deal with these pressures, but he must also balance the competing factions within his party. The APC is a coalition of very different parties, which came together to defeat Jonathan and his People’s Democratic Party (PDP). As such, it contains many powerful factions and wannabe king – or at least prince – makers. By delaying and downplaying appointments, Buhari has consolidated his power in the party, at least for now.

Ngozi Okonjo-Iweala, finance minister from 2003–2006 and again 2011–2015, wrote a book about Nigeria called Reforming the Unreformable. It was meant to be about her and others’ successes in her first shot at the job and transforming Nigeria’s economy and governance. Clearly, not all of the success was permanent. Buhari has spent his first four minister-less months in office attempting a much deeper clean.

Because much of this process remains partly obscured from the public, it is hard to assess how successful his operation has been. To the optimistic, the first four months of Buharism 2.0 have removed some of the structures that enable looting. To the sceptical, he’s avoided internal political difficulties but at the cost of policy stagnation.

Either way, Buhari has clearly made some changes to the system. Has he been able to do enough and fast enough and will governance revert to type when ministers take up their positions? Perhaps the second, not first, hundred days of this presidency will be the most telling.

Categories
Economy

Libyan oil in turmoil

Although it has some of the lowest oil production costs in the entire world, attractive geology counts for little in war-torn Libya. Few welcomed the brutal rule of Muammar Qaddafi but since his overthrow the country has been riven by a range of ethnic, regional, religious and political differences that are tearing at the fabric of national cohesion.

Production on most oil fields has been halted and with no end in sight to the fighting, oil companies are beginning to write off their onshore assets, although the picture is a little less bleak offshore.

One of the biggest problems facing oil firms with interests in the country is the divided nature of Libya. Rival factions have controlled different parts of the country since the fall of Qaddafi in 2011. The government in Bayda, which is led by Abdallah Al Thani, is recognised by most western states but a rival regime under the leadership of Omar Al Hassi controls Tripoli and Misrata. Once the growing influence of Islamic State is thrown into the mix, the political picture is very bleak.

Oil fields, pipelines and export terminals are often under the control of different militia, which makes getting oil out of the country difficult on most fields. Even where armed groups allow exports they often demand hefty bribes in return. Groups opposed to the Tripoli government have blocked pipelines in the west of the country, including from the El Sharara Field, which would normally produce 340,000 b/d. Oil production has fallen from 1.6m b/d before the civil war to between 350,000 b/d and 380,000 b/d today, according to figures from the internationally recognised government.

Oil exports are the primary means of financing each militia and political authority, and some groups have attacked oil tankers and terminals in an attempt to cut off funding to their rivals. In late May, a tanker operated by the General National Maritime Transport Company was bombed by the Libyan Air Force, which is under the control of the Bayda government, as it arrived at the Port of Sirte. According to Bayda, the tanker was carrying arms as well as fuel. Insurance premiums for all vessels entering Libyan ports have rocketed, making it expensive to deal in Libyan oil at a time when global oil prices have fallen.

In addition, some of the refugees seeking to cross from Libya to Europe have attempted to stow away on tankers. Libya has become the most popular sailing point for refugees and economic migrants seeking to enter Europe because of the lack of effective border controls in the country. Finally, workers have halted operations on some fields and pipelines in pay disputes, while protests by local people have seen pipelines cease operation for weeks at a time in some areas.

The Petroleum Facilities Guard has been set up to defend oil and gas industry assets held by the Bayda government, including the country’s biggest oil terminal, Es Sider. However, it is struggling to contain advances by Islamic State. A spokesperson for the Guard said: “Battles in populated areas cannot be won by air power alone, ground forces are needed and we, once again, affirm that we can do it if weapons and ammunition are made available.”

The two NOCs

The situation is further confused by the existence of two state oil companies, both called the National Oil Company (NOC), based in east and west Libya respectively. Most international customers continue to deal only with the NOC in Tripoli but the Bayda government is trying to change this. In mid-August, the new chairman of NOC Bayda, Nagi Al Maghrabi, said: “We are about to announce an international conference in Benghazi so the world can meet the legitimate firm. I call on the world to heed this call.” Dealers are obviously concerned about the legal ownership of any oil they handle but Bayda’s international recognition should help it to secure legitimacy for its own NOC.

The Bayda NOC has now lifted the force majeure on Ras Lanuf, which it announced in December 2014 because of security threats. It is now considering re-opening the facility, which in turn could enable production of 300,000 b/d to resume on mothballed fields. Al Maghrabi is also keen to resume operations at Es Sider. However, a spokesperson for maritime security firm MAST warned in late July: “Under force majeure Ras Lanuf was not a target for ISIS. As it returns to working status, it is likely to be of increasing economic importance to the Bayda-based government and ISIS forces may therefore see it as a potential target for a terror attack. Care must therefore be taken by vessels visiting Ras Lanuf.”

Some European oil companies operating in the country have been forced to write off or write down the value of their Libyan assets. BP and Total have written off $1,355m between them this year. BP returned to the country in 2007 when it signed a huge exploration deal but has been forced to suspend its exploration efforts as a result of the dire security situation. Italian firm Eni, which is the biggest foreign investor in the country, has managed to maintain some of its operations, although some of its staff have been kidnapped. Most output in eastern Libya is controlled by Arabian Gulf Oil Company, an offshoot of the NOC, which is currently producing about 220,000 b/d. Onshore oil production in western Libya has been almost entirely halted.

The United Nations talks designed to create a government of national unity out of some of the main groups are making slow progress but now also include efforts to reach agreement on oil terminal management. The MAST spokesperson commented: “UN-sponsored unity government negotiations appear to have stalled for now, with the Tripoli government withdrawing from the talks. However, the UN process will continue and it is likely that a series of ad hoc discussions will take place between the various government and tribal factions.”

Neil Ford

Categories
Trade & Investment

South Africa boosts Iran ties

Exiled in Mozambique and striving to keep his embattled movement alive, ANC president Oliver Tambo’s relentless quest for support against apartheid found a new outlet in February 1979.

Energised by the overthrow of the Shah of Iran just days earlier, Tambo wrote a gushing letter to the revolutionary cleric Ayatollah Khomeini, welcoming ‘the new Iran into the ranks of the anti-imperialist and anti-racist community of nations…Long live the Great Iranian Revolution”.

Thirty-six years later, and an ANC-led South Africa is once again at the forefront of attempts to welcome Iran back to the fold after the signing of a landmark international deal on its nuclear programme.

But while celebrating a shared revolutionary heritage remains very much on the agenda, the planned removal of global sanctions on Iran is sparking talk of renewed economic cooperation between the old friends.

“South Africa is one of our friends and we have excellent relations with the country,” says Mahmoud Soroush, first counsellor at the Iranian embassy in Pretoria.

“The two countries have the potential to cooperate in many areas, and in past years this cooperation has continued even during the sanctions.”

That relationship, boosted by Iran’s anti-apartheid credentials and South Africa’s consistent diplomatic support for a “peaceful” Iranian nuclear programme, has recently been the basis for a series of bilateral and trade summits between Tehran and Pretoria.

In May – two months before Iran’s deal with the United States and other world powers – South Africa’s international relations minister Maite Nkoana-Mashabane visited Tehran alongside a business and trade delegation. In August, shipping magnate Sello Rasethaba led a further delegation, while press rumours abound that millionaire businessman and deputy president Cyril Ramaphosa could be planning a visit soon.

The flurry of activity – Soroush points to planned cooperation in oil and gas, agriculture, telecoms and industry – suggests a renewed attempt to shift longstanding diplomatic relationships onto a more commercial footing.

That goal was previously stunted by the stringent sanctions regime, which complicated South Africa’s strongest commercial tie to Iran – the import of crude oil. South Africa receives around 30% of its imported oil from Iran, according to Ebrahim Deen, a researcher at the Afro-Middle East Centre. Under sanctions, that had to be routed through third parties – a strategy which irked Tehran and put a temporary strain on relations.

Iran is keen to resume its status as South Africa’s primary source of oil and kick-start a trade previously estimated at some 380,000 barrels per day, while for its part, South Africa’s status as a net importer of oil means that it is keen to resume a reliable supply as soon as possible.

Richard Mallinson, geopolitical analyst at Energy Aspects, says that could take several months owing to the continued exclusion of Iranian banks from global markets. And at a time of low global oil prices, undergoing the added complications of dealing with Iran could still prove more costly than alternatives. 

“You still need the actual legal specifics of sanctions relief to begin, which is unlikely to be until early-to-mid next year. But companies will be weighing it up so you may see more in terms of non-binding agreements or headline announcements before you get tangible deals,” he said.

Sarosh Zaiwalla, an anti-sanctions lawyer who has fought cases on behalf of Iranian banks and oil entities, says that years of industry neglect are likely to be overcome quickly.

“It takes six months to a year because you have to redevelop the oil and gas fields … it’s not going to happen overnight but things are going to move pretty fast once sanctions are actually removed,” he said.  

That desire to get ahead of the curve and re-engage goes beyond oil and gas companies. Sanctions have decimated bilateral trade, which amounted to just R162m ($12m) in 2013. Yet 2007’s figure of R1.5bn ($111m) hints at the previous efforts made by leading South African companies, including mobile operator MTN and chemicals manufacturer Sasol, to gain exposure to the market.

MTN, a 49% shareholder in IranCell, the second-largest Iranian operator, has been cut off from some $1.1bn stranded in the country, while Sasol sold its Iranian operations in 2013 for $238m.

Nevertheless, an emerging, consumer-driven Iran remains an attractive destination for outward-looking South African firms.

“SA companies such as MTN and PetroSA will now be able to operate more easily, and in terms of MTN the country will be able to recoup its 1bn in repayments that had been frozen as a result of sanctions. Moreover, other mining and service industries will begin showing interest in the largely untapped Iranian economy,” said the Afro-Middle East Centre’s Deen.  

For South African firms willing to do business with Iran, paying close attention to the prevailing geopolitical situation remains essential. The Iranian nuclear deal remains contingent on a supportive US administration – by no means a given with Republican opposition and presidential elections in 2016 – and Iran’s compliance with the strict terms of the deal. Several sectors of the Iranian economy, particularly arms sales, are likely to remain off limits to South African firms.

Companies looking to do business with Iran will also need to learn how to navigate the country’s economy, argues Michael Rubin, a former Pentagon official and Iran expert at the American Enterprise Institute. The opaque nature of Iran’s economy, he says, and the lack of a commercial law framework, will complicate African attempts at engagement.

“What African countries are going to learn is that the way the Iranian economy is set up, most of the import/export as well as heavy industries with which they are going to want to get involved are actually run by companies affiliated with the Revolutionary Guards … When they’re doing business with Iranians, some of the Iranians are going to use that as an excuse to conduct activities those [African] countries don’t like.”     

But if South African firms do chance their hand, they are unlikely to be alone. European trade delegations, including from Germany and Britain, have been queuing up to do business with their erstwhile enemy. For Ebrahim Deen, the years of close diplomatic ties sparked by Oliver Tambo’s 1979 letter could prove the decisive factor in competing for deals.

“Were a South African company and a European company to compete, the South African company can, in my opinion, expect to get at least a more sympathetic response from the Iranian authorities, contingent on the company’s capacity.”

David Thomas

Categories
Economy

“Not being involved in Africa would be madness for Britain”

For Britons accustomed to tuning into the nightly news or leafing through the daily papers, Afro-optimism has recently been in short supply.

Images of Eritreans and Somalis, stranded in Calais refugee camps and exhausted by the dangerous Mediterranean crossing, seem all too familiar for viewers weaned on TV appeals for a stricken continent. 

Take a trip to Parliament, and the prevailing view of Africa is markedly different. Speaking to African Business, Grant Shapps, the UK’s Minister for Africa, insists that the continent is on the rise – and says that optimistic engagement will continue to trump the voices of isolation when it comes to British policy.

“Not being involved in this part of the world would be utter madness for Britain – it would be like ignoring potential incredible markets in both directions,” he enthuses. For some, Shapps’ passionate vision of Britain as a ‘small island with global reach’ may appear to vie uneasily with the public’s ambivalence towards African migration. But the Minister insists that Britain’s successful engagement begins far from UK border posts.

“I think we see our role as to provide help in places which need assistance rather than to take the view that the solution lies in bringing Africa to the UK – which will neither solve the problems here or there,” he says.

Shapps argues that a yearning for Europe is depriving Africa of its most capable citizens – the young and mobile – and that new forms of assistance are needed to stem the exodus. His attempt to kick-start Britain’s centuries-long involvement with the continent will span roles at the Foreign Office and the Department for International Development, focusing on business promotion, development assistance and traditional diplomacy.

Speaking a day ahead of a trip to Rwanda, Shapps says that all three strands will be on the table during talks in Kigali, long a favoured development partner of the UK. 

“This is a country with whom since it has been rebuilding we’ve had a huge input, I think we’ve spent probably £123m a year in international development terms with that country. We also have a diplomatic relationship with some bumps and knocks on the way or good things which happen. But we’re always interested in deepening relationships.”

Although Rwandan President Paul Kagame’s government might welcome the business and development support, Shapps’ call for the continent’s leaders to respect term limits could prove more controversial. As Kigali considers allowing Kagame a third term in office in the face of international criticism, it’s a conversation that Shapps says he will “certainly” be having with his Rwandan counterparts.

Echoing Barack Obama’s African Union speech in July, Shapps insists that strict term limits are the key to stronger governance.

“Look at Goodluck Jonathan in Nigeria, you’ll think what you want about the way he ran that country and he’ll have many critics, but you can’t take away the fact that he just allowed the first democratic transfer of power in Nigeria – that’s a legacy worth having”.

But with a nod to the fact that Britain no longer calls the shots on the continent, Shapps admits that relations with African countries will not be defined by lectures on different governance systems.

“We never want to pull our punches, but that said we’re not going round the world to lecture people on their systems of government – that’s not a mature relationship,” he says.

As important will be Britain’s ambition to increase business ties with the continent – a relationship historically dependent on the import of raw materials from the continent, and the export of finished products from Britain’s industrial heartlands.

Nowadays, Shapps says, the talk is much more likely to be around technology transfer, with British mobile companies penetrating remote villages powered by UK solar companies. As the continent’s businesses increasingly look overseas for new export markets, the debate has turned to ways of tearing down old trade barriers and eroding protectionism. Barack Obama’s recent renewal of the African Growth and Opportunity Act – a Clinton-era programme that allows African manufacturers tariff-free access to the US market – appears to light the way to a future of free trade.

A similar bid to open new markets lies behind Energy Africa, a flagship UK scheme due to launch in October that aims to take advantage of the plummeting costs of solar technology and British expertise in the sector.  

“We’re going to sign compacts with African countries who want to make this happen. The compact will say that they will work with us to remove barriers. Companies are only able to do this if there’s a level playing field…We think it’s the market’s place to fill the gaps in and we will perhaps help with early stage financing,” he says.

Working alongside Barack Obama’s Power Africa, a similar initiative launched in 2012, and other donor partners, the scheme envisages achieving universal electricity access by 2030 – a key UN Sustainable Development Goal.  

But in an acknowledgement of the friendly rivalry at play with the United States, Shapps says that Energy Africa is intended to have a much greater impact in remote areas than its American counterpart.

“[Obama’s] approach is, we’ll build big power stations, build a grid and deliver it that way. I think that’s probably quite good for industry, it’s necessary for cities. I think it’s unimaginable that it will ever get round to delivering to this woman called Elizabeth that I met in a remote village in Tanzania…who I don’t think will ever see that power.”

Such cooperative initiatives, dependent on the goodwill of African countries, may seem modest for a country whose history looms large on the continent. But Shapps insists that the UK’s soft-power approach will ultimately prove more effective than some of Africa’s more forceful global partners.

“The Chinese picture is mixed, I’d say we have a much more sophisticated approach to development in Africa, where we really focus on things like building better institutions and poverty reduction…Britain is really good at thinking through how we don’t just do development but leave the populations better off.”

If the combative talk is anything to go by, it appears that the UK is refusing to accept its anointed status as a relic of Africa’s imperial past.

“Healthy competition is great…I love to see those communists competing with us,” jokes Shapps.  

David  Thomas

Categories
Economy

La Banque de la CEDEAO – The ECOWAS Bank – O Banco da CEDEAO JOB ADVERTISEMENT FOR YOUNG PROFESSIONALS

La Banque de la CEDEAO – The ECOWAS Bank – O Banco da CEDEAO

JOB ADVERTISEMENT FOR YOUNG PROFESSIONALS =-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
The ECOWAS Bank for Investment and Development (EBID) is an international financial institution owned by the fifteen Member States of the Economic Community of West African States (ECOWAS), namely Benin, Burkina Faso, Cabo Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and

Togo. The headquarters of the Bank is in Lome, Togolese Republic.

In continuation of its Young Professionals Programme, EBID seeks to recruit young West African university graduates and those from other tertiary institutions of learning living in the West African sub region or the diaspora.

Eligibility criteria

The citizens of ECOWAS Members States who fulfill the following criteria are invited to apply:

  •   Less than 30 years of age at the time of the recruitment;

  •   At least a Masters degree or equivalent qualification in fields related to activities of the Bank in particular, Asset/Liabilities Management, Audit, Communication and Marketing, Corporate Language Services, Finance, Infrastructure, Legal counselling, Private Sector Operations, Public Sector Operations, Risk Management, a qualification in any other area that is relevant to the activities of the Bank;

    Details concerning this advertisement are on the web site of EBID http://www.bidc-ebid.org/

    Application dossiers from interested should be forwarded in paper form to the following address no later than 20th November 2015 to the following address:

N.B. :

ECOWAS BANK FOR INVESTMENT AND DEVELOPMENT (EBID) Department of Administration and General Services Young Professionals Recruitment Programme
128, Bd. du 13 janvier BP 2704 Lomé – Togo

Only shortlisted candidates will be invited for interview. EBID reserves the right not to respond to any application.