Tag Archives: Ivory Coast

Are Metros Overrated?

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This is from a story in The Guardian:

The ITDP bemoans Africa’s obsession with metros. Lagos in Nigeria – the largest city in the world without a functioning mass transit system – has been trying to build a metro since the 1980s. In the latest of many incarnations, the project was supposed to begin operations in 2012 at a cost of $2.4bn (£1.9bn). Six years after the supposed start date, construction is “nowhere near complete”, says Kost.

Abidjan, the economic capital of Ivory Coast, began construction of a metro last year. The French-financed and -built line is projected to carry 500,000 passengers a day at a cost of $1.7bn. Dar es Salaam’s bus system, by contrast, has capacity for 400,000 people and cost less than a 10th of that – about $150m.

Addis Ababa in Ethiopia opened a Chinese-built and -operated light rail line last year at a cost of $475m. Shenzhen Metro Group has a deal to run it for the first five years.screen shot 2019-01-09 at 4.03.54 pm“With a metro, an international firm will often just parachute in its own system,” says Kost. “Bus rapid transit allows existing stakeholders to get involved. That’s what we did in Dar es Salaam and what we’re planning in Nairobi, where the bus bodies will be built in the city and local operators will look after tickets, fare collection and IT. It’s good for the development of the local economy.”

Regular readers know that I have a bias for Kost’s argument. Read the whole thing here.

H/T Dina Pomeranz.

Several African public figures (and associates) mentioned in the Panama Papers

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The Guardian has an excellent summary of what you need to know about the Panama Papers, the data leak of the century from the Panama-based law firm Mossack Fonseca.The firms specializes, among other things, in incorporating companies in offshore jurisdictions that guarantee secrecy of ownership.

Here is a map of the companies and clients mentioned in the leaked documents (source). Apparently, the entire haul (2.6 terabytes of data) has information on 214,000 shell companies spanning the period between 1970 to 2016.

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The leaked documents show links to 72 current or former heads of state and government. So far the highest-ranking public official most likely to resign as a result  of the leak is the Prime Minister of Iceland, Sigmundur Gunnlaugsson (see story here and here)

For a list of African public officials mentioned in the leaked documents see here. And I am sure we are going to hear a lot about all these rich people in developing countries.Screen Shot 2016-04-03 at 9.18.42 PM

Closer to home, the Daily Nation reports that Kenya’s Deputy Chief Justice, Kalpana Rawal, “has been linked to a string of shell companies registered in a notorious Caribbean tax haven popular with tax dodgers, dictators and drug dealers.” Justice Rawal has been dodging retirement for a while. May be after the latest revelations might find a reason to call it quits.

The ICIJ website has neat figures summarizing some of the findings from the massive data haul. Also, here is a Bloomberg story on the tax haven that is the United States. 

The Anatomy of Tax Evasion in Africa

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Africa Confidential has a great piece analyzing leaked documents from PwC, the professional services firm, showing the various arrangements that enable multinational companies to evade taxes in Africa. You can read the whole piece here (gated).

  • One of the measures PwC advised multinationals to take was to create a wholly-owned Luxembourg-based subsidiary which would hold the rights to intellectual property used by the rest of the group. The rest of the group would then pay licensing fees to the Luxembourg-based subsidiary which, by agreement with the authorities, would be granted tax relief of up to 80%……
  • A second tax avoidance mechanism simply involved the companies becoming incorporated in Luxembourg. In 2010, Luxembourg concluded an agreement with several companies of the Socfin (Société financière) agribusiness group, which was founded during the reign of Belgian King Leopold II by the late Belgian businessman Adrien Hallet. The companies chose Luxembourg as their base and made an agreement under which their dividends were subject to a modest 15% withholding tax, a lower figure than those in force where their farms are located (20% in Congo-K and Indonesia, 18% in Côte d’Ivoire).
transfer-pricing

The art of hiding profits

Altogether, Socfin subsidiaries in Africa [in Sierra Leone, Nigeria, Liberia, Cote d’Ivoire, and Cameroon] and Indonesia produced 123,660t. of rubber and 380,770t. of palm oil in 2012. The combined turnover of its main African subsidiaries reached €271 mn. in 2013. The list also includes the 100%-owned Plantations Socfinaf Ghana Ltd. (PSG) and Socfin-Brabanta (Congo-Kinshasa). Socfin also holds 88% of Agripalma in São Tomé e Príncipe and 5% of Red Lands Roses (Kenya).

  • A third mechanism involves cross-border lending within a group of companies. Companies registered in Luxembourg are exempt from tax on income from interest.

According to the Thabo Mbeki High Level Panel report between 1980 and 2009 between 1.2tr and 1.4tr left Africa in illicit flows. These figures are most likely an understatement. Multinationals, like the ones highlighted by Africa Confidential, accounted for 60% of these flows.

Alex Cobhan, of the Tax Justice Network, has a neat summary of the various components of illicit financial flows (IFFs) and how to measure them. He also proposes measures that could help limit IFFs, including: (i) eliminating anonymous ownership of companies, trusts, and foundations; (ii) ensuring that all bilateral trade and investment flows occur between jurisdictions which exchange tax information on an automatic basis; and (iii) making all multinational corporations publish data about their economic activity and taxation on a country-by-country basis.

Alex Cobham blogs here.

Quick hits

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Guide to arguing on the internet (HT Lauren).

Speaking of arguing on the internet, I like the drama that is spats between economists and other academics on their respective blogs.

The Economist presents the faces of famine in the Horn. It is beyond sad that so many people should be condemned to suffer this man-made tragedy.

Brett Keller has posts here and here on Sam Childers (a.k.a. machine gun preacher), a gun-runner into the habit of doing morally and ethnically dubious things in the name of God. Keller says that Childers is “stockpiling arms at his orphanage and has admitted to selling weapons to unnamed armed factions in Sudan, Uganda, and Rwanda.”

In Zambia (where I shall be for the elections in Sept.) the politics of citizenship and belonging are yet to be settled 50 years after independence. We recently witnessed the dangers of de-legitimizing whole sections of countries as outsiders in Cote d’Ivoire. I hope that if Sata ever wins he will not do what incumbent Ivorians did to ignite a rebellion in the northern reaches of their country. For more on this check out this great book on the Ivorian collapse. I have read it and absolutely loved it.

A muddy few months ahead for the South African government. Infighting with the ANC top brass might mean an early exit for President Zuma. With over 60% of the votes in the last election, the ANC is essentially an oversize coalition prone to internal wrangles. It will be interesting to see how Zuma weathers the storm in the midst of challenges from both COSATU and Malema.

Lastly, the current issue of the Journal of African Economies looks at the impact of higher education in Africa. The main takeaway is that the low quality of education at lower levels (primary and secondary) has meant that the biggest bang for the buck on the Continent, as far as education is concerned, only comes with higher education. Too bad that many of those that get higher education are underpaid or out of the Continent all together.

countdown to wednesday begins

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On Wednesday a few Kenyan cabinet ministers, wealthy businessmen and security chiefs – mostly from central Kenya and the Rift Valley – will be exposed as suspects behing the post election violence in 2007-08 that killed 1333 Kenyans and displaced hundreds of thousands. Needless to say, this will have significant political consequences.

The expected political realignments following the initiation of this phase of the ICC process will shed some light on what Kenyans should expect come 2012. It will also be a litmus test on how much the Kenyan political elite is committed to reforms and fighting impunity. Kibaki and Odinga will either have to defend or cut loose some of their most trusted lieutenants.

In other news Laurent Gbagbo is still refusing to relinquish power in the Ivory Coast. Moreno Ocampo should warn him that if any more people die as a result of his refusal to obey the electoral outcome he will be held responsible.

Elections have consequences.

 

ouattara won, but gbagbo determined to latch on to power

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The Ivorian electoral commission declared Alassane Ouattara, the northern candidate, as the winner of the presidential runoff held on Sunday. Ouattara got 54.1% of the vote. Incumbent Laurent Gbagbo disputed the results and had the country’s constitutional court reject the pronouncement. His supporters contend that there were significant irregularities in three regions in the north of the country.

Gbagbo (left) and Ouattara

UN and other mission observers declared that the election globally reflected the will of the people of Cote d’Ivoire. The BBC reports that the country’s military has sealed the borders amid rising tension and confusion over the political stalemate in the country. Mr. Gbagbo has been president since 2000.

For the sake of institutionalism the international community should not allow Mr. Gbagbo to remain in power. His 10-year tenure has not done much in terms of healing relations between the two halves of the country that fought the 2002-04 civil war. The fact that even his incumbency advantage could not help him beat Ouattara signals his general incompetence and the mass’s disaffection with his rule.

Cote d’Ivoire has a population of 21 million people, 49% of whom live in urban areas. Life expectancy in the country is a dismal 56 years. Only 48% of Ivorians  age 15 and over are literate. Ivorians’ per capita income is US $1700 and 68% of them depend on agriculture for livelihood. 42% of Ivorians live below the international poverty line of $2 a day.

Cote d’Ivoire is the world’s largest producer and exporter of cocoa beans and a significant producer and exporter of coffee and palm oil. Because of the political risk in the country Cocoa for March delivery climbed $110, or 4 percent, to $2,868 in New York.

laurent Gbagbo might have lost to Ouattara

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There are no prizes for guessing why the government of Ivory Coast is delaying the release of provisional results from Sunday’s presidential runoff. It is almost certain that the challenger, Alassane Ouattara, won against Laurent Gbagbo, who has been dictator president since 2000. Mr. Gbagbo, seeming desperate, has already indicated that he will challenge results from three regions in the north.

I will post the provisional results as soon as I get an inkling of what they look like.

Map of Cote d'Ivoire

The Ivorian civil war (2002-2004) split the country in two, with the rebels (New Forces) controlling the north. Mr. Ouattara is from the north while Mr. Gbagbo is from the south.

The BBC reports that the main election observer missions in the country had no problems with how the election was conducted in the north.

The information vacuum has fueled security uncertainty and speculation. The Daily Nation reports:

“People are going a bit crazy. There are hundreds of rumours of violence so the atmosphere is rather tense,” said Marcel Camara, 37, hunkered down with his aunt and two cousins at their home in the Abobo district of Abidjan, where a curfew has been in force since Saturday.

crucial elections in west africa

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The Ivorians have a runoff election tomorrow while the Guineans (Guinea-Conakry) get to find out who will be their president on December 2nd.

The Ivory Coast is still trying to recover from the disastrous turmoil and civil war that visited her following the death of founding president Houphouet Boigny. The civil war split the country in two, with the southerners (actually just nationalist Abidjanites) accusing most northern politicians of being foreigners. Among the said “foreigners” is the challenger in tomorrow’s election, Alassane Ouattara. Mr. Ouattara hopes to unseat Mr. Laurent Gbagbo who has been in power since 2000.

In Guinea the loser in the runoff went to the supreme court to challenge the results. The country is one of the more unstable places on the continent with a military that is lacking in discipline professionalism.

Out of the many trouble spots in West Africa at the turn of the century, Guinea (Conakry), Guinea-Bissau, Ivory Coast and Niger are the main laggards slowing down the region’s match towards political stability, irrespective of regime type.

the cost of malaria, and the continent’s disease burden

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Academics have already established that the economic costs of malaria and Africa’s general disease burden are not trivial. Think of lots of man-hours wasted due to illness and government expenditures on medication, time and money that could be used to build roads and what not.

To illustrate the point, not anyone is immune from Malaria. Drogba, the illustrious Ivorian forward, got malaria and had to take a few days off from his duties at the London club, Chelsea.

“He has this virus and, obviously, he lost power and training.”

“He lost his condition. He’s had treatment and now he’s OK. He’ll come back immediately in the best condition.”

the world cup

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African football is on the ropes. Of the six teams in the tournament in South Africa only Ghana has managed a victory, and even that only through a penalty kick. With Cameroon out (they crashed out today against an arguably weaker Danish team) the best African team in the tournament is Cote d’Ivoire. But the elephants got dealt a bad hand and find themselves having to struggle against Portugal and Brazil if they are to advance. If I had it my way I would have a CAF inquiry at the end of this tournament to determine exactly what it is that continues to perpetuate mediocrity in African football.

The organization of the World Cup tournament by the South Africans has been superb but going by the comments on facebook, among other websites, many are hugely disappointed by the lackluster performance exhibited by the Continent’s representatives at the tournament.

togo goes to the polls

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Togo, a tiny West African country of 6.6 million, goes to the polls today. Faure Gnassingbe, President of Togo and son of the late strongman Gnassingbe Eyadema, is hoping to be re-elected for a second term. His father ruled the country uninterrupted between 1967 until his death in 2005. The younger Gnassingbe was then installed by the military as interim president before elections were held. Most observers believe that these elections were not free and fair. Many hope that this time round things will be different.Yeah right.

African democracy’s teething problems will not go away just yet. 2010’s busy elections schedule will surely bring some of these problems to the fore. The top four to watch include the elections in Rwanda, Ethiopia, Madagascar and Ivory Coast. Paul Kagame will most certainly win in Rwanda, but the question is how much room he will give the opposition this time round. Mr.Kagame has been president since his forces ended the Rwanda genocide in 1994 and has been touted to be among the more economically liberal strongmen on the Continent (he is no Tutu but he is good for business). In Ethiopia Meles Zenawi’s party, Ethiopian People’s Revolutionary Democratic Front (EPRDP), is also expected to win. Mr. Zenawi has been in power since he deposed the tin pot despot Mengistu Haile Mariam in 1991. Here too it remains unclear just how much opposition Mr. Zenawi will tolerate in parliament.

Madagascar, as you may remember had a coup in March of last year. It will be interesting to see who emerges as winner in this election. The contest is between the factions led by former DJ and mayor of Antananarivo Andry Rajoelina and the man he kicked out of office Marc Ravalomanana.The political instability in this island country off the east coast of the Continent has not gone without economic consequences.

Ivory Coast, once a paragon of stability in West Africa, is also holding elections this year. This year’s polls were originally planned to be held in 2005 before a bloody civil war that divided the country in half got in the way. The land of Houphouet-Boigny has not known peace and stability since the strongman’s passing in 1993. Mr. Houphouet-Boigny was president between 1963 until his death in 1993. Among his accomplishments was the relocation of the capital of Ivory Coast to Yamoussoukro, his home town, and the construction there of the US $ 300 million Basilica of Our Lady of Peace (which the Guinness Books of records lists as the largest church in the world).

shame on the Ivorian government

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The BBC has this really sad story about the dumping of chemicals in Abidjan, Ivory Coast by Trafigura, an oil trading company.

The story reveals that the company  knew about the harmful effects of the chemicals. Internal emails contained messages like:

“This operation is no longer allowed in the European Union, the United States and Singapore” it is “banned in most countries due to the ‘hazardous nature of the waste”

And yet the Ivorian government allowed its citizens to be exposed to the waste from Trafigura. Shame shame shame.