AFRIKASOURCES published the COMESA Risks Bulletin #26, June 2010 edition.

1. A F R I K A S O U R C E S
COMESA RISKS
ASSESSMENT BULLETIN
A monthly publication Issue no 26 - JUNE 2010
Eight opposition parties in Burundi have demanded a repeat of communal elections, held on 24 May,
claiming the ruling party - which won a landslide victory - was involved in massive fraud and poll-
rigging.
Figures published by the National Independent Electoral Commission showed a large victory [64 %] for
the Conseil national pour la defence de la démocratie-Forces de defence de la démocratie (CNDD–
FDD). In a statement issued on 26 May, a Belgian observer mission from the Association of Western
Parliamentarians for Africa (AWEPA) made a positive assessment of the poll. Jean Marie-Vianney
Kavumbagu, chairman of COSOME - Coalition of Civil Society Organizations for the Monitoring of
Elections - also said despite some irregularities, the vote was free and transparent. European Union
observers confirmed the local-level vote met international standards.
Elections
Nevertheless, on the 1st June, the ongoing presidential election process was thrown into chaos when
five main opposition contenders pulled out of the race.
President of Comoros Sambi's mandate expired on May 26 after the Constitutional Court annulled a law
extending his term.
The court's decision followed weeks of heightened political tension on the coup-prone islands.
Negotiations between Comoros' leader and opposition parties on a date for presidential elections have
since stalled with President Mohamed Abdallah Sambi's rivals accusing him of illegally clinging on to
power.
Under the constitution, the presidency rotates among the three islands of Grande Comore, Anjouan and
Moheli. Many on the opposition-stronghold of Moheli, which is next to take over the presidency, feel
Sambi's manoeuvrings are an attempt to rob them of the top political post.
African Union send Franceso Madeira as a special envoy to try to reach a deal but in a televised
Presidential crisis address to the nation, Sambi said the talks had failed and formed an interim government made up of his
old administration and a handful of representatives allied to the governor of Anjouan.
Russian Navy to Use Djibouti Port for Safety Convoys
Russian warships will use the port of Djibouti while patrolling the Aden Gulf to protect the cargo ships
from the pirate attacks, announced the Russian Navy. "The government of Djibouti and the country's
Navy command allowed our ships to enter the port for replenishing the supplies and crews recreation,"
the Navy representative said.
The first Russian ship which has already exploited this opportunity was anti-submarine cruiser Marshal
Shaposhnikov that visited Djibouti on May 16-17. However, Russia is not going to set up a naval base in
this tiny African country, the spokesman of the Russian Main Navy Headquarters told Itar-Tass news
agency.
Russia is joining France, USA, Germany, and Japan who are all using Djibouti as a base in their fight
Russian Base against piracy in the Horn of Africa.
Source: http://english.ruvr.ru/2010/05/19/8121390.html
After 10 years of fruitless talks under the aegis of the Nile River Basin initiative, four African states –
Ethiopia, Rwanda, Uganda and Tanzania – brushed aside opposition from Egypt and Sudan and signed
a new water management agreement. Kenya, Burundi and the Democratic Republic of Congo due to
sign the agreement at a later date. This is aimed at lifting Egypt’s rights to veto upstream projects and
setting up a permanent commission to oversee more equitable use of the river.
Egypt, which depends on the Nile for almost all of its water and regards the river as a national security
issue, has questioned the legality of the new agreement. Nabil Abdel-Fatah, researcher at Al-Ahram
Center for Political and Strategic Studies criticized the official approach, saying that the Egyptian
response to Nile issue has been “slow and lacking in dynamism”. He added: “The Egyptian political and
diplomatic structure still perceives Africa from a position of superiority; they still see it as the old Africa
Nile Water tensions just after colonialism”.
Indeed, this confrontation appeared as a wake-up call for Egypt to change its policy regarding Africa.
Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [Senior analyst]
The content of this publication is based on a selection of information browsed by our services. Request for a more detailed analysis at payet@in.com – © Afrikasources Consult Ltd – Port-Louis [Mauritius]
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2. A F R I K A S O U R C E S
Main party EPRDF chairman Prime Minister Meles Zenawi called the results the will of the electorate
that has recognised the ruling party’s achievements over the past few years. Two opposition elite
groups have rejected the results and called for a fresh vote as soon as possible.
Indeed, European Union and U.S. came out quickly, albeit quietly, to contradict Zenawi’s self-
congratulatory victory speech. While both noted that elections were largely peaceful and free of
violence, they did not meet “international standards”.
Meles' regime faces a strong Medrek challenge in the southern Oromiya region, a rebellion in the
Somali ethnic region of Ogaden and even unprecedented opposition in its own historical fiefdom of
Tigray. Foreign criticism of the regime's authoritarianism has been muted, notably because Meles
A contested victory Zenawi-- whose country borders Eritrea and Somalia -- remains a key US and Western ally in the fight
against Islamic extremism.
Thomas Chiramba, the Chief, Freshwater Ecosystems Unit in the Division of Environmental Policy
Implementation at the United Nations Environmental Programme affirms that the water crisis facing the
country and specifically Nairobi and its environs is manageable.
John Akoten a former Executive Director with Institute of Policy Analysis and Research (IPAR) argues
that to meet the water needs of the population and industries, it is imperative for the stakeholders to
facilitate construction of more dams in addition to having several waterways that can collect rainwater
and drain it into the dams.
Much of Kenya faced in 2009 what has been called the deepest drought in living memory. In 2010,
water levels in important rivers dropped, forcing the Kenya Electricity Generating Co. to reduce
Water crisis hydropower production. Nairobi endured inflated water prices, intermittent blackouts and electricity
rationing. Crops failed throughout the country, even in the breadbasket region between Nairobi and
Lake Victoria.
Following large victory in elections, Prime Minister Navin Ramgoolam formed new government
composed of 16 ministers from his ruling Labor Party, six ministers of the Mauritius Socialist Movement
(MSM), two ministers from the PMSD and one minister from the Rodrigues Island party.
Pravind Jugnauth, leader of the MSM, has be appointed deputy prime minister and finance minister of
the new government, succeeding to the controversed Rama Sithanen. The Prime Minister himself
decided to hold the portfolio of Defence, Home Affairs and External Communications, while the portfolio
of Foreign Affairs was reallocated to Arvin Boolell.
The new Government is facing many challenges as the euro zone crisis could slow Mauritius' economic
growth in 2010. The Prime minister has decided to create a Joint Working Crisis Committee (JWCC)
between the Ministry of Finance, the Joint Economic Council, which represents the private sector and
Same new Government the Bank of Mauritius. He should work on the way to create a Currency Equalization Fund (CEF).
Activists lobbying for democratic reform in Swaziland have vowed to push ahead with their campaign,
even though several of them were temporarily detained for blocking five border posts between South
Africa and Swaziland. The protest was planned to coincide with the date on which King Sobhuza, father
of the current Swazi monarch, Mswati, declared a state of emergency in the country 33 years ago.
Under the state of the emergency, Sobhuza banned all political parties, introduced 60-day detention
without trial, outlawed marches and demonstrations - and scrapped the constitution.
Tensions increased when on May Day, Sipho Jele – who as well as being an opposition PUDEMO
activist, was a member of the Swaziland Agricultural and Plantations Workers Union (SAPWU)- was
arrested for wearing a political t-shirt. Three days later, Sipho’s family were told that he was 'found'
hanged in his cell but it is believed he was killed in custody.
Sipho death questioned The Southern African Catholic Bishops' Conference has since asked President Jacob Zuma to
intervene in the ongoing Swaziland's "political crisis".
Zimbabwe, which has arrears of $1.2 billion to the International Monetary Fund, African Development
Bank and World Bank, is struggling to attract foreign investment and aid. The coalition government, led
by President Robert Mugabe and Prime Minister Morgan Tsvangirai, has been locked in disputes since
its inception in February 2009. Investors are also being deterred by laws requiring foreign businesses to
sell stakes to locals.
Zimbabwe is working towards meeting requirements set by the IMF and World Bank to qualify as a
Heavily Indebted Poor Country, with the aim of having its debt cancelled. Zimbabwe’s economic growth
will probably reach 2.2% in 2010, far from the 7% claimed by the Government. Indeed, investors are
skeptical as the government’s Indigenization and Empowerment Act requires foreign businesses to sell
51 percent of their shares to black Zimbabweans over the next five years.
Urgent need of money In its annual review of Zimbabwe's economy, the International Monetary Fund said there were signs
economic and humanitarian conditions were improving after a decade of steep economic decline and
hyperinflation.
Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [Senior analyst]
The content of this publication is based on a selection of information browsed by our services. Request for a more detailed analysis at payet@in.com – © Afrikasources Consult Ltd – Port-Louis [Mauritius]
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3. A F R I K A S O U R C E S
Quote
Nile Water Conflict - “The Egyptian political and diplomatic structure still looks at Africa from a position of superiority, they still see it as the old Africa
just after colonialism. Egypt must stop perceiving Africa in such a regressive way and our dealings with Africa should be revised on a more equitable and
developmental level” - Nabil Abdel-Fattah, researcher at Al-Ahram Center for Political and Strategic Studies
Natural hazards alerts The Natural Disaster Risk Index (NDRI), Maplecroft Legal and Regulatory
DRCongo - 17 May 2010. Landslides caused by a released by Maplecroft, ranks 229 countries Environment Atlas 2010
volcanic eruption kills at least a dozen people and according to the human impact of natural The Legal and Regulatory Environment Atlas
leaves at least 36 other missing on Mount disasters in terms of deaths per annum and per 2010 has been developed by Maplecroft to
ELGON, in North Kivu. million of population, plus the frequency of events enable organisations to identify and monitor a
as well as the likelihood of earthquakes, volcanic range of risks in 172 countries arising from a lack
Uganda. 15 May 2010. Landslides in Uganda kill eruptions, tsunamis, storms, flooding, droughts, of respect for the rule of law, respect for property
8 people and leave 1,500 homeless, having landslides, extreme temperatures and epidemics. rights, insufficient access to remedy through legal
destroyed a number of properties. The landslides Asia accounts for most of the disaster-related systems, corruption, corporate governance, the
in Mbale, Sironko, Tororo, Kabale and Kanungu deaths since 1980. regulatory framework and supply chain complicity
were caused by torrential rain. Bangladesh, Indonesia, Iran and Pakistan top a risk.
new ranking of countries at “extreme risk” of http://www.maplecroft.com/about/news/lre.html
Kenya. 10 May 2010. Local news sources report experiencing natural disasters compiled by a
that families have ignored a government order to global risk assessment company. The Earth Observatoryʼs mission is to
move from their homes as landslides continue in African countries at extreme risk are Ethiopia, share with the public the images, stories, and
parts of Central Province. The previous week, 34 Sudan and Mozambique, with 95 percent of discoveries about climate and the environment
families were evacuated from their homes after a casualties due to drought. Since 1980 drought that emerge from NASA research, including its
landslide destroyed several homes in Mathira has caused 9,800 deaths in Ethiopia, 5,300 in satellite missions, in-the-field research, and
East district, Central Province. Two people were Sudan (ranked 5th) and over 3,400 in climate models.
killed as a result of the landslide in Mathira East. Mozambique (9th). http://earthobservatory.nasa.gov/NaturalHazards/
Chinese investments deepens in Africa
A recent oil deal in Nigeria suggests that China is set to continue investing in AFRIKASOURCES CONSULT Ltd is a multiservice
Africa in a bid to ensure a secure supply of resources to fuel its fast-growing development consulting firm that provides tailor-
economy. On 13 May 2010, China State Construction Engineering Corporation made expertise and services to governments,
(CSCEC) and Nigeria's state-run oil firm NNPC signed a deal worth $23bn that international organizations, private companies and
projects managers...
will see the Chinese company build three oil refineries and a petrochemicals We offer independent expert advices and practical
complex. The project will add 750,000 barrels per day (b/d) of extra refining support services in the effective implementation of
capacity, well in excess of the domestic demand of 450,000 b/d that is development strategy, helping our clients identify
expected when the project is finished in five years time. best value, manage risk, and realise higher levels of
success from their programme and initiatives.
The Chinese decision to focus its attention upstream in the production process Our capabilities are grouped into the following
reflects the Nigerian government's requirement that foreign companies must invest in developing the areas, which run horizontally throughout our
country's infrastructure before they can benefit from its oil and gas exports. The fact that China is market sectors:
willing to expose itself to the risks of investing in Africa demonstrates the lengths that the Chinese • Consulting - Advising clients on the practical
authorities will go to to ensure access to oil supplies. Energy security is a growing concern for China implementation of development strategy from
the earliest stages of project lifecycles.
given the significant amount of energy that will be required for it to continue on its current • Managed Solutions - Providing teams of
development path. experienced, specialist practitioners to manage
Meanwhile, a Chinese deal in the Democratic Republic of the Congo has been hit by charges of and implement client project.
corruption. The $9bn deal was signed in 2008 with China agreeing to fund copper and cobalt mines, • Monitoring and evaluation, planning at
regional, national and local level, logical
4,000km of roads and railways and new schools, hospitals and clinics in return for 6.8 million tonnes framework analysis, training and workshop
of copper and 620,000 tonnes of cobalt over 25 years. The deal is under investigation by a facilitation, project management
commission set up by the National Assembly of DR Congo regarding the alleged disappearance of a • Lobbying, “spin doctor”, “image building”
$23 million signing bonus that the Chinese were due to have paid Gecamines, the local partner in
the project.
The DRC deal, along with a number of other Chinese investments in Africa, has been the subject of
criticism, with claims that China is only interested in exploiting Africa's natural resources to fuel its
rapidly expanding economy with little regard for African development. China has retorted that such
criticism comes from Western nations that fear China's economic growth and that, by investing in
Africa, China is contributing to development there.
These deals are examples of the growing integration between China and Africa. With such
integration comes an increased exposure to risk factors in the partner country, such as economic is Advisor in Investment Strategy, Sustainable
d e ve l o p m e n t p o l i c i e s a n d S t ra t e g i c R i s k
contagion and political instability. In particular, China has left itself open to the consequences of the management.
unstable and insecure nature of many African states. He has worked on investment strategies and
Between 2006 and 2008, Chinese exports to Africa increased from $26.7 billion to $49.8 billion, strategic risk evaluation in La Reunion and Africa for
according to a report to be released this week by Chatham House, a London-based policy group. the last 10 years.
He’s been involved in various projects in India,
And Chinese imports during the same period more than doubled, from $28.8 billion to $56.8 billion. China, Zambia, Djibouti, Egypt, Senegal and has
worked for COMESA.
See “Investment in Africa: All to Play For” - CHATAM HOUSE [2010]
He’s based in Cairo [EGYPT].
Source: http://maplecroft.com/portfolio/ethical_insight/articles/23940/
Afrikasources advises on strategic risk management in Africa
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