The 2013 Resource Governance Index

The 2013 Resource Governance Index (published by the Revenue Watch Institute) is out. The top performing African countries include Ghana, Liberia?, Zambia and South Africa, with partial fulfillment. The bottom performing countries are Equatorial Guinea, Zimbabwe, South Sudan, the Democratic Republic of Congo and Mozambique.

The 58 nations included in the report “produce 85 percent of the world’s petroleum, 90 percent of diamonds and 80 percent of copper.” Ghana, where we are doing some evaluation  work on extractive sector transparency initiatives, is the best performing African country on the list. Image

More here. 

And in related news, The Africa Progress Report was released last week. The report details the massive loss of revenue by African governments through mismanagement – either by commission and/or omission – of extractive resources. For instance:

The report details five deals between 2010 and 2012, which cost the Democratic Republic of the Congo over US$1.3 billion in revenues through the undervaluation of assets and sale to foreign investors. This sum represents twice the annual health and education budgets of a country with one of the worst child mortality rates in the world and seven million pupils out of school.

The DRC alone is estimated to have 24 trillion dollars worth of untapped mineral resources.

The most bizarre case of resource management in Africa is Equatorial Guinea, a coutnry that is ranked 43rd on the global per capital GNI index but ranks 136th on the Human Development Index (2011).

Below is a map showing flows related to Africa’s vast resources:

RESOURCE-MAP

US Africa Policy, A Response

This is a guest post by friend of the blog Matthew Kustenbauder responding to a previous post.

On the question of human rights guiding America’s foreign policy in Africa, I agree with you; it shouldn’t be the first priority. The US needs a more pragmatic development diplomacy strategy, which would help African countries develop just as it would help American businesses thrive.

But I disagree with your characterization of Hillary’s position in this respect. Here’s Secretary Clinton’s own words:
“Last year I laid out America’s economic statecraft agenda in a series of speeches in Washington, Hong Kong, San Francisco, and New York. Since then, we’ve accelerated the process of updating our foreign policy priorities to take economics more into account. And that includes emphasizing the Asia Pacific region and elevating economics in relations with other regions, like in Latin America, for example, the destination for 40 percent of U.S. exports. We have ratified free trade agreements with Colombia and Panama. We are welcoming more of our neighbours, including Canada and Mexico, into the Trans-Pacific Partnership process. And we think it’s imperative that we continue to build an economic relationship that covers the entire hemisphere for the future.” 
“Africa is home to seven of the world’s ten fastest-growing economies. People are often surprised when I say that, but it’s true. And we are approaching Africa as a continent of opportunity and a place for growth, not just a site of endless conflict and crisis. All over the world, we are turning to economic solutions for strategic challenges; for example, using new financial tools to squeeze Iran’s nuclear program. And we’re stepping up commercial diplomacy, what I like to call jobs diplomacy, to boost U.S. exports, open new markets, lower the playing field – level the playing field for our businesses. And we’re building the diplomatic capacity to execute this agenda so that our diplomats are out there every single day promoting our economic agenda.” 

One of the problems, however, is that the pragmatic approach articulated by the Secretary doesn’t trickle down through the bureaucracy. This is especially true, ironically, of the State Department’s primary development diplomacy arm, USAID, which has a deeply entrenched culture of being anti-business. It’s a huge problem, and part of the reason why American foreign policy in Africa has been so slow to adjust to new economic realities.

Security drives US Africa Policy

Security drives US Africa Policy

Academics schooled in all the latest development orthodoxies but lacking the most basic understanding of economic or business history have flocked to USAID, so that the suggestion that American economic interests should guide development policy – making it a win-win for Africa and America – is anathema. It’s also why the Chinese are running all over the US in Africa.

As a prominent economic historian recently remarked in the Telegraph, “While we [Western governments] indulge our Victorian urge to give alms to the Africans, Beijing is pumping black gold.” And this is just it. As long as the US approaches Africa as a beggar needing to be saved and not as a business partner worthy of attention, both sides will continue to lose out.

In this respect, what Africa does not need is another “old Africa hand” steeped in conventional development ideas and old dogmas about what’s wrong with Africa and why the US must atone for the West’s sins. For this reason alone, John Kerry – not Susan Rice – probably stands a better chance, as the next Secretary of State, at putting American foreign policy toward Africa on a more solid footing.

- Matthew Kustenbauder is a PhD candidate in history at Harvard University.

Meles Zenawi, Prime Minister of Ethiopia, is dead at 57

The BBC reports:

Ethiopian Prime Minister Meles Zenawi has died at the age of 57, state media say, after weeks of illness. A government spokesman said Mr Meles had died in a hospital abroad – but did not say exactly where or give details of his ailment. Speculation about his health mounted when he missed an African Union summit in Addis Ababa last month.

Mr. Zenawi is believed to have died in a Belgian hospital – the Saint-Luc University Hospital in Brussels (where he was allegedly receiving treatment for an acute case of hematologic cancer). The last time he was seen in public was on the 19th of June 2012 at the G20 summit in Mexico.

For now the leadership transition in Ethiopia, Sub-Saharan Africa’s second most populous country, appears to have gone smoothly. According to the BBC report, the deputy Premier - Hailemariam Desalegn – will take over.

Mr. Desalegn is from the south of Ethiopia, away from the political centre of gravity of the country, which for centuries has been to the north – in Tigray and Amhara dominated areas.  

It is not yet clear if the smooth transition will stick. As the Economist reported a couple of weeks ago:

“power [in Ethiopia] has still rested with a clutch of Mr Meles’s comrades from his home area of Tigray in northern Ethiopia, many of them once members of a Marxist-Leninist group that used to admire Albania’s long-serving Communist leader, the late Enver Hoxha. This hard core, including the army’s chief of staff, General Samora Younis, retains a “paranoid and secretive leadership style”, according to a former American ambassador to Ethiopia, David Shinn. Were Mr Meles to leave in a hurry, relations between the young modernisers and the powerful old guard might fray.”

Under Mr. Zenawi (May 1991- Aug. 2012) Ethiopia was a mixed bag. His rule was characterized by one of the worst human rights records in the world. But he also brought some semblance of stability following the misguided and murderous Marxist-Leninist dictatorship of the Derg under Mengistu Haile Mariam; and presided over an economy with one of the fastest growth rates on the Continent.

It is also under Meles Zenawi that Ethiopia invaded Somalia to rid it of the Islamic Courts Union (ICU) which was beginning to spread Somalia’s chaos into Ethiopia’s Ogaden region (it helped that the U.S. also wanted the ICU ousted from Mogadishu because of their alleged links of al-Qaeda).

A recent profile in the Atlantic summarizes it all:

“for every Muammar Qaddafi there’s a Meles Zenawi, the shrewd, technocratic Prime Minister of Ethiopia. Inside of the country, he’s known for imprisoning his political opponents, withholding development assistance from restive areas, stealing elections, and cracking down on civil society NGOs. In the rest of the world, he’s often praised for his impressive economic record, though not for his human rights. Zenawi has attracted Western support by being a responsible steward of aid money, a security partner in a rough region, and a G20 summit invitee.”

I remain cautiously optimistic that the Ethiopian ruling elite will pull through the rocky transition period. The next elections are due in 2015. In the current parliament the ruling party, the EPRDF, and its allies control nearly all of the 547 seats.

Beyond Ethiopia’s borders, the absence of Mr. Zenawi will certainly be felt in Somalia (which is presently struggling to get on its feet after decades of total anarchy and whose government partly depends on Ethiopian troops for security) and South Sudan (where Addis Ababa has been a broker in past conflicts between Khartoum and Juba). Ethiopia’s hostile relationship with Eritrea might also experience some change, most likely for the worse as whichever faction emerges victorious in Addis engages in sabre rattling in an attempt to prove their hold on power.

Energy in East Africa

Still on my ongoing project on commodities in Africa, I came across an interesting piece on prospecting for oil in East Africa in which an industry expert had this to say:

The success rate in this region is outstanding. To provide some context, oil and gas exploration typically has a success rate just 10-20%. That’s terrible when you think about. It can cost $50 million to sink an offshore well, and the chance of making a financial return could be as low as one in ten.

But East Coast African energy exploration stands out from the crowd because in all but a few cases they hit oil or gas. To be exact — the success rate has been 87%. A strike rate of close to 9 out of 10 is almost unheard of.

Kenya, South Sudan and Uganda have commercially viable oil reserves. Tanzania has gas and, together with Kenya, has stepped up offshore prospecting in the Indian ocean.

And it is not just foreign MNCs that are in on the game. Locals, in collaboration with foreign investors, are also getting a piece of the energy bonanza in East Africa. Business Daily, a Kenyan paper, recently profiled one George Kariithi, a businessman who started off as a marketing executive and has since built multiple companies in the wider region. His latest investment is in Kenya’s emerging coal sector.

Reason for African Petro-Rulers to be Worried

Africa’s petrorulers (heads of state of Angola, Cameroon, Chad, Congo-Brazzaville, Equatorial Guinea, Gabon, Ghana, Nigeria, South Sudan, and Sudan) may be headed for tough times later this year. According to a piece by (Steve Levine) over at FP, Saudi Arabia – the world’s leading oil producer – is considering flooding the global oil markets with the aim of sticking it to the Russians and Iranians. Saudi action of this nature could lower prices to as low as US $40 a barrel from the current $83.27.

With the exception of Ghana and Cameroon, such a drop in oil prices would almost certainly lead to political unrest in the rest of Africa’s oil producers. Sudan and South Sudan are already facing huge revenue shortfalls due to a dispute over the sharing of oil revenue.

More on “The Coming Oil Crash” here.

Is regionalism helping the East African Community

Evidence seems to suggest it is:

Trade between the EAC countries almost doubled from $2.2 billion in 2005 to $4.1 billion in 2010, although regional trade with the rest of the world expanded faster, meaning that the relative share of intra-EAC trade has stayed around 21 per cent since 2005 [The African Average is 11 %]. “Europe enjoys 64 per cent internal trade; our 21 per cent is better than we thought, but we have to make efforts to do better,” said Betty Maina, chairperson of the Kenya Association of Manufacturers.

Kenya still remains the biggest economy in the region, although some convergence is definitely likely to happen in the next decade or so given the large hydrocarbon discoveries in Uganda and off the Tanzanian coast.

The region’s oil consumption rose from 96,000 barrels per day in 2003 to 144,000 barrels per day in 2010, with Kenya consuming more than all the other EAC countries put together. East Africa now accounts for 10 per cent of all mobile subscribers in Africa, with the number of mobile subscribers surging from just three million in 2002 to a staggering 64 million in 2010.

More on this here.

South Sudan to relocate capital to Ramciel

The Sudan Tribute reports:

“The survey for the proposed new capital of South Sudan, Ramciel, is expected to be completed within the next six months, reports the official in charge of the project.

resolved to suspend any construction of new public buildings for the national government in Juba.

Juba was disqualified for a number of reasons including administrative stalemate over which level of government its jurisdiction should fall under.”

That is the official reason.

Source: Political Geography Now

I know very little about the deliberations that resulted in the move but another reason could be that Juba was too far from the new nation’s centre of (ethno) political gravity (see maps; click on image to enlarge). Relocations of capitals almost invariably have political considerations. One only hopes that the Bari community whose ancestral homeland is around Juba will not suddenly find themselves completely abandoned by the central government.

The government should ensure that Ramciel does not suddenly suck in all the money. It could prove beneficial to decouple the political and economic capitals of the country.

Source: Gulf 2000 Project

On the plus side this is a sign that the new government in Juba is willing to try out new things. A fresh start in Ramciel might not be such a bad idea.

A Ugandan journalist and a politician respond to Kony 2012

Angelo Izama, Ugandan journalist (and a good friend of yours truly) has a thoughtful op-ed piece in the Times. He makes the case that:

Campaigns like “Kony 2012” aspire to frame the debate about these criminals and inspire action to stop them. Instead, they simply conscript our outrage to advance a specific political agenda — in this case, increased military action.

African leaders, after all, are adept at pursuing their own agendas by using the resources that foreign players inject and the narratives that they prefer — whether the post-9/11 war on terror or the anti-Kony crusade. And these campaigns succeed by abducting our anger and holding it hostage. Often they replace the fanaticism of evil men with our own arrogance, and, worse, ignorance. Moreover, they blind us by focusing on the agents of evil and not their principals.

At the same time over at FP Nobert Mao, politician from northern Uganda and former presidential candidate, has the following to say:

It’s clear that the aim of the video [Kony 2012] was never intellectual stimulation. I don’t think the founders of Invisible Children are the foremost analysts of the complicated political, historical and security dynamics in our troubled part of Africa. They certainly wouldn’t earn high marks in African Studies. But I will go to my grave convinced that they have the most beautiful trait on earth — compassion.

Such sentiments matter, even today.  There are those who say the war is over in Northern Uganda. I say the guns are silent but the war is not over. The sky is overcast with an explosive mix of dubious oil deals, land grabs, arms proliferation, neglected ex-combatants, and a volatile neighborhood full of regimes determined to fish in troubled waters. What we have is a tentative peace. Our region is pregnant with the seeds of conflict. The military action in the jungles of Congo may capture Kony, but we need to do more to plant the seeds of peace founded on democracy, equitable development, and justice. Like peace, war too has its mothers, fathers, midwives, babysitters, and patrons. Perhaps Kony 2012 will help sort out the actors. The video has certainly shaken the fence, making fence-sitting very uncomfortable, indeed.

The two may disagree on the usefulness of tactics such as those that made the now famous video, but they certainly agree on the need to acknowledge agency of local actors in all these problems that require outside intervention.

My two cents on this is that there is definitely room for Africans to shape the narrative and tactics of advocacy in Western capitals (or elsewhere). Emotionally charged  mobilization tactics, like Kony 2012, are definitely a distraction from the real issues. But they also present an opportunity for African actors to leverage international attention and support against their own leaders who refuse to deal with problems that affect their daily lives. I am glad that in the case of Kony 2012 Ugandans have stepped in to provide perspective on the narrative and, hopefully, influence the eventual response by the relevant policymakers in DC.

Kenyan Court Orders Bashir Arrest, Sudan Expels Kenyan Ambassador

UPDATE:

The BBC reports:

Sudan ordered the expulsion of the Kenyan ambassador after a Kenyan judge issued an arrest warrant for Sudan’s President Omar al-Bashir, Sudan’s foreign ministry has said.

Mr Bashir is wanted by the International Criminal Court (ICC) for alleged war crimes in Darfur.

Sudan has ordered the Kenyan ambassador to leave the country within 72 hours.

It has also ordered the Sudanese ambassador in Kenya to return to Khartoum.

*************************************************************

A Kenyan court has issued an arrest warrant for Sudan’s President Omar al-Bashir over alleged war crimes in Darfur.

The ruling came after Kenya allowed Mr Bashir to visit in August in defiance of an International Criminal Court (ICC) warrant for his arrest.

The judge said he should be arrested if he “ever set foot in Kenya” again, the AFP news agency reports.

Kenya is a signatory to the treaty which established the ICC in 2002.

The new Kenyan constitution requires that the government implements its international treaty obligations. The ruling, though without much bite – I doubt Bashir will need to be in Kenya any time soon, has immense symbolism in the region.

It also matters for Kenyan domestic politics. Presently, a few high ranking Kenyan politicians – including the Finance minister, two former ministers and former police boss – are on trial at the ICC for crimes against humanity. The accused await judgment on the admissibility of their cases later this year or early next. The Bashir ruling means that if the charges against the “Ocampo Six” are confirmed but the government drags its feet in implementing an arrest warrant then the courts will step in.

More on the Bashir case here and here.

In other news, Uganda and Tanzania have rejected Khartoum’s petition to join the East African Community, citing “several issues like their democracy, the way they treat women and their religious politics.” Yeah right.

More on Eritrea and armed groups in eastern Africa

While Eritrea has in the past been repeatedly accused of supporting Somalia’s Islamist militia Al Shabaab, a charge it strenuously denies, the current report catalogues Afewerki’s growing notoriety in the world of terrorism finance, and in particular the global web through which these funds are routed, with Kenya serving as a global transaction distribution hub.

The report details the country’s activities in funding the terror group, following the money trail from its citizens in the diaspora in Europe and North America, through Dubai and the Eritrean embassy in Nairobi, and into the hands of Al Shabaab, all the while concealed in convoluted and opaque informal financial networks.

That is The East African reporting on Eritrea’s support for armed groups in the wider eastern African region. Mr. Afewerki’s actions are a threat to regional security for the following reasons:

1. Eritrea’s (opportunistic and cynically instrumental) use of Islam as a galvanizing force (against “Christian” Ethiopia) threatens to ignite a wider regional conflict that would probably include North Sudan and Egypt. The reason this is likely is because:

       (a) Remember that the use of the waters of the Nile continues to be a source of friction between Egypt and the riparian states of eastern Africa. Egypt itself has in the past been linked to armed groups in Somalia opposed to Ethiopian rule of the Ogaden region. Both countries have a history of funding rival clan militias in Somalia. In all of this the principle of my enemies’ enemies’ are my friends will most likely apply.

        (b) Because of its own problems with South Sudan, North Sudan might have an interest in using Eritrea’s networks to destabilize its southern neighbor. Recently the government of South Sudan banned all people of Somali origin from entering the country by land for security reasons. Juba clearly suspects either direct or indirect links between Khartoum and the myriad armed groups in war-torn Somalia

2. Given that the groups it supports (e.g. al-Shabaab) have other enemies besides Ethiopia, President Afewerki has effectively declared war on countries like Uganda, Burundi, South Sudan and Kenya that have also either been attacked or threatened by al-Shabaab. I wouldn’t be surprised if one or two of these EAC states decided to materially support the Ethiopian side the next time Addis and Asmara fight over their barren disputed border lands.