Update on the situation in various COMESA countries.

1. COMESA
SITUATION
BULLETIN
Volume 5 – N
o
5- May 2013 - Monthly published by AFRIKASOURCES
Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [CEO-Senior analyst]
The content of this publication is based on a selection of news browsed by our services. Request for a more detailed analysis at payet@afrikasources.com – © Afrikasources Consult Ltd
After
polls,
eyes
on
Kenya’s
future
Kenya’s new president, Uhuru Kenyatta (a former finance minister), has appointed his former colleague, the Harvard-
educated Mr Henry Rotich as Cabinet Secretary for the National Treasury. Mr Rotich was the head of macroeconomics at
the treasury in the finance ministry since March 2006. Mr Kenyatta also named diplomat Amina Mohamed as foreign
secretary nominee, the first woman to be nominated for the post since independence in 1963. Other nominees included
James Macharia, a banker, for the health ministry, and Fred Matiangi for the information portfolio.
Kenya's private sector is upbeat about the economy after President Uhuru Kenyatta announced some major reforms
during his inauguration speech. Key among the Kenyatta's pledges was the promise to drastically ease the business
registration process in the country. Kenya is currently ranked among countries in Africa where business registration
processes are painstakingly long but the country’s good performance has been underpinned by overall strong economic
policies.
More: Business Daily - http://tinyurl.com/cvpv2xq
Sudan - Sudanese insurgents have carried out their first combined attack, a surprise push into a strategic and previously peaceful region, but analysts
doubt the rebels' readiness to take Khartoum by force.
Swaziland - ANC called for the democratisation of neighbouring Swaziland, in a rare public rebuke of the country's ruling monarchy.
Mauritius - Floods devastated the Mauritian capital, Port-Louis, on Mar. 30. 11 people were killed, a hundred were wounded and thousands of dollars of
damage was caused. Emergency services were overwhelmed and unable to provide effective response to the disaster.
Djibouti – Following parliamentary election on February, President Guelleh named former defence minister Abdoulkader Kamil Mohamed to replace
longtime ally Dileita Mohamed Dileita who had served as prime minister since 2001.
Egypt – The country will keep all state-owned firms in public hands, President Mohammed Morsi says in a speech, calling a halt to a flawed privatisation
programme that failed to kick-start the country’s economy.
Millions
missing
in
Congolese
mining
taxes
Congo has attracted international firms like Freeport-McMoRan, Glencore and Randgold to mine its rich copper, cobalt and gold
deposits, but remains one of the most corrupt countries. Tax authorities have failed to account for $88 million in revenue from the
booming mining sector, according to Mack Dumba Jeremy, national coordinator in Congo for the Extractive Industries Transparency
Initiative (EITI). "DGRAD (the Tax Agency) must prove that the money actually arrived in the public treasury in 2010. If they can't
then the executive committee of EITI will go to the courts in order to launch an inquiry into the whereabouts of this $88 million," said
Jeremy. EITI is an international initiative which aims to improve transparency in resource-rich countries by tallying up the amount
paid by companies and how much governments say they receive.
At the same time, London-listed ENRC is facing a corruption probe led by Britain's Serious Fraud Office following internal
investigations and whistleblower allegations concerning various assets in Africa. The UK Listing Authority (UKLA) has also ordered a
"diagnostic review" of its acquisitions in DR Congo, including a 2010 acquisition that handed it control of copper mines held by rival
First Quantum Minerals Ltd until they were seized by the Congolese government.
Ethiopia is negotiating with Brazil, Russia and India to finance and build rail links after agreeing terms last year with Chinese and
Turkish companies for other routes. The country (Africa’s second-most populous nation), is building 4,744 kilometers of electrified
railway lines at a cost of 110.8 billion birr ($5.9 billion) as it seeks to reduce road-transport costs constraining the continent’s
fastest growing non-oil producing economy over the past decade. Growth may slow to 6.5 percent this year and next, compared
with average growth of 8.7 percent over the past five years, according to International Monetary Fund data.
Ethiopia operates a state-led economy and is prioritizing investment in infrastructure as it seeks to transform one of the world’s
least developed countries into a middle-income nation by 2025. The decision to use electric trains is because Ethiopia, which has
the continent’s second-biggest hydropower potential, generates cheap electricity and spends all of its estimated $3 billion annual
export earnings on importing fuel.
Foreign investors are granted contracts on condition that 60 % of the funding is provided by their countries “policy banks” in
foreign exchange, Ethiopian Railways Corp. General Manager Getachew Betru said.
Ethiopia
Courts
BRICS
for
Rail
Projects
A team from the International Monetary Fund (IMF) visited Moroni from March 13 to 22, 2013 for its 5th mission to review the Union
of Comoros' Extended Credit Facility (ECF). According to M. Harry Trines (Head of the mission), « Performance under the
programme has been satisfactory. All the quantitative targets for end-December 2012 were met, as were four of the five structural
benchmarks under the programme ». Therefore, the country will receive a disbursement of USD3.45 million from the IMF. However,
the IMF called on the country to forge ahead with the privatisation of Comores Telecom in 2013: « Areas of focus included the
implementation of the organizational frameworks for the public administration, continued improvement in banking supervision,
privatization of Comores Telecom, and reforms of the public utility (MAMWE) and “Société Comorienne des Hydrocarbures” ».
Establishing reliable electricity and energy supplies is crucial to sustaining economic growth and improving the business
environment. Few days later, the World Bank approved a grant of US$3 million to help Comoros scale up an emergency response in
parts of the island hit by devastating floods.In the past decade, when GDP growth was at its strongest, absolute poverty has climbed
from 16.7% to almost 20%.
IMF
supports
Comoros

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Author: Jean Philippe PAYET - The content of this publication is based on a selection of news browsed by our services. Request for a more detailed analysis at payet@afrikasources.com – © Afrikasources Consult Ltd
NEXT EDITION: June 7th
2013
IMF
prescriptions
hurt
Malawi
say
NGOs
Markets
are
Endorsing
Path
to
Growth
Recent
increase
in
Uganda’s
military
expenditure
even
amidst
global
and
regional
defence
cuts
might
be
the
latest
indication
of
President
Museveni’s
strategy
to
fasten
his
grip
on
power
and
his
influence
on
the
region.
It
comes
at
a
time
when
a
new
report
by
SIPRI,
indicates
that
globally
and
regionally,
military
expenditure
is
declining
:
2012
saw
military
expenditure
in
Sub-­‐Saharan
Africa
drop
by
3.2
%.
Uganda
was
the
second
largest
importer
in
the
Sub-­‐Saharan
region
of
arms
between
2008-­‐2012
accounting
for
15
per
cent
after
South
Africa’s
24
percent.
It
also
reportedly
bagged
17
%
of
the
of
the
small
arms
and
light
weapons;
assault
rifles
and
submachine
guns,
transferred
in
Sub-­‐Saharan
Africa
and
Kenya,
Uganda’s
other
regional
military
competitor,
17%
23%
in
the
Arms
Flow
to
Sub-­‐Saharan
Africa
report.
Sudan
is
always
cited
among
what
whets
Museveni’s
arms
appetite.
Recently,
the
country
complained
to
the
African
Union
that
Uganda
was
supporting
rebellion
in
Sudan
and
Sudanese
media
reported
that
Khartoum
was
in
talks
with
forces
opposed
to
President
Museveni.
The
African
diaspora
is
a
major
source
of
foreign
income
so
large
that
it
now
outstrips
foreign
aid
sent
by
Western
donors.
Nearly
140
million
Africans
live
abroad.
The
money
they
send
back
home,
remittances,
is
worth
far
more
-­‐
in
value
and
usefulness
-­‐
than
the
development
donations
by
Western
financial
institutions.
The
exact
amount
of
these
remittances
is
unknown
because
not
all
of
it
is
sent
through
official
banking
channels.
But
the
official
volume
to
the
continent
has
gradually
increased
over
the
years,
from
$11
billion
in
2000
to
$60
billion
in
2012,
according
to
the
World
Bank.
As
a
proportion
of
gross
domestic
product,
remittances
in
Africa
range
from
next-­‐to-­‐nothing
to
almost
five
per
cent.
Worldwide
remittances
to
developing
countries
were
$351
billion
in
2011,
far
exceeding
the
$129
billion
in
official
development
assistance,
according
to
the
World
Bank.
More on Africa in Fact, April 2013: Aid-The bottomless pit
The
6
h
Conference
of
the
African
Ministers
in
charge
of
Integration
[COMAI
6]
was
held
in
Mauritius
on
15
to
19
April
2013.
The
theme
of
this
year’s
conference
was
‘Governance
of
Integration’.
Discussions
focused
on
the
status
of
integration
in
Africa
and
the
implementation
of
COMAI
V
recommendations,
consideration
and
adoption
of
the
recommendations
of
the
Experts
meeting,
consideration
and
adoption
of
the
Draft
Ministerial
Declaration.
Panel
discussions
involved
several
sub-­‐themes,
namely
Pan
Africanism
and
Integration,
Impact
of
Globalisation
on
the
Governance
of
Integration
in
Africa
and
the
furtherance
of
African
leaders’
interest
in
the
integration
process.
One
important
decision
relates
to
the
formation
of
a
Second
Bloc
of
combined
RECs
as
endorsed
by
the
18th
Ordinary
Session
of
the
AU
Assembly
in
January
2012.
This
would
be
an
emulation
of
the
Tripartite
Arrangement
(between
EAC/SADC/COMESA).
The
second
bloc
is
being
set
up
to
undertake
consultations
and
eventual
negotiations
with
other
regional
groupings
on
the
process
of
continental
free
trade
area
with
a
view
to
enhancing
Intra
African
Trade.
Other
key
recommendations
include
devoting
one
of
the
ordinary
sessions
of
the
AU
Summit
to
development
and
integration,
convening
a
consultative
meeting
on
the
‘Blue
Economy’,
commissioning
a
study
to
propose
ways
and
means
for
the
rapid
integration
of
Island
States
and
landlocked
countries
as
well
as
the
facilitation
of
the
movement
of
people.
Challenges
impending
regional
integration
in
Africa
remain,
said
AUC
Deputy
Chairperson
Erastus
Mwencha,
emphasizing
in
this
regard,
the
governance
and
the
lack
of
clear
implementation
and
accountability
mechanism,
among
others.
The
inefficient
free
movement
of
persons
across
the
continent;
the
over-­‐
reliance
on
donor
funding
for
financing
integration
projects;
the
insufficient
citizen
ownership
and
the
lack
of
an
enabling
environment
for
a
people-­‐centered
approach
to
policy
making,
as
well
as
the
low
implementation
rate
of
numerous
signed
and
ratified,
with
insufficiently
transposed
legal
texts
into
national
legislation
and
the
intra-­‐African
trade
which
remains
low
at
10-­‐12
per
cent
of
the
continental
total;
were
among
the
major
obstacles
featured
by
M.
Mwencha.
More:
http://foreign.gov.mu/English/COMAI%20VI/Pages/default.aspx
6th
CONFERENCE
OF
AFRICAN
MINISTERS
IN
CHARGE
OF
INTEGRATION
[Mauritius]
In the face of severe economic hardship and an ominous economic growth prognosis for the foreseeable future, the Malawi Chamber
of Commerce and Industry (MCCCI) was quoted as claiming that the economic reforms that critics have been against are actually the
necessary cure for the country. But for the Council for Non-Governmental Organisations in Malawi (Congoma), International Monetary
Fund (IMF) prescriptions imposed on Malawi such as a combined dose of currency devaluation; floatation of the kwacha and
removal of subsidies of fuels is hurting Malawians.
Following a mission in April, IMF decided to released US$19.6m ECF funding to Malawi. Indeed, “Malawi’s performance under the
fund-supported program has been commendable despite a difficult environment. The policy reforms have begun to yield positive
results, including increased availability of foreign exchange. The government also successfully rolled out its social protection
programs,” said the IMF Team.
IMF had suspended ECF in 2011 over what they called failure by then ruling Democratic Progressive party government led by the late
president Mutharika. President Joyce Banda who came into power after the death of Mutharika saw devaluation as ‘necessary evil’.
She devalued the kwacha by almost 50% and later floated it. As a result the cost of basic goods rose dramatically pushing the
inflation rate well above 35 percent.
Rwanda’s debut on the global bond market raised $400 million with an offering that was heavily over-subscribed by nearly eight
times. Final yield on the 10-year bonds of 6.875% was less than reported expectations in the low-7% area, due to strong
buyer interest. Proceeds will go to repayment of bank loans, infrastructure such as a hydropower project, expansion of the
national airline RwandAir, and the completion of a convention center in the capital of Kigali.
Fitch, which affirmed a “B” rating on Rwanda, noted its “solid economic policies and a track record of structural reforms,
macroeconomic stability, and low government debt” (23.3% of GDP in Rwanda, compared to the median of 43.5% among B-
rated peers). Certainly, the country is not without its challenges; it is landlocked, which vastly increases transportation costs for
imported goods, and more electrical generation capacity is needed. It is often clouded by geopolitics, most notably the morass
of conflict in the neighboring Democratic Republic of the Congo (DRC). Kagame draws criticism for being too tightly controlling,
and human rights watchers charge the country suppresses political opposition and free speech.
Critics highlight that the country is already the first beneficiary of Donors Aid in Africa.
Are
Uganda
and
Sudan
entering
arms
race
?
Why
Diaspora’s
Money
is
good
REGIONAL
NEWS