Finally, Nigeria’s ministerial list is out. The four-month-long search for the country’s “impeccable characters” with outstanding records of achievements in business, politics and society came to a quiet end at the end of September.
Senate President Bukola Saraki read out the names of President Muhammadu Buhari’s 21 nominees, the first batch of nominations, for the Senate’s consideration, on October 6.
Constitutionally, the president could end up making more than 2,000 appointments over the next four years of his administration, all things being equal. Every decision, every appointment a Nigerian president makes is subjected to constitutional, political, religious and ethnic scrutiny.
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After a year-long season of political campaigns and elections that left the economy largely unattended to by the Goodluck Jonathan administration, Buhari’s decision not to appoint cabinet ministers in the early days of his administration was a hugely unpopular move.
Nigerians therefore realized very early on that this was going to be a new kind of president.
“Nigeria must first put new rules of conduct and good governance in place,” Buhari told Nigeria’s Guardian newspaper in July.
“Integrity and experience will be central to President Buhari’s actions and decisions,” Babatunde Kwame Ogala, a lawyer and chieftain of the ruling All Progressives Congress (APC) party told FORBES AFRICA. “Beyond the need for a few political compromises here and there, you can see that the president is not someone that can be tele-guided by anyone or any interest group. He’s got a totally independent mindset.”
By delaying and downplaying appointments, the Nigerian leader was not only consolidating his hold on power, he was clearly hoping to replace the profligate culture of the past with a new political ethos. Previous presidents had used these appointments to settle political IOUs, compensating cronies, party chieftains and political sponsors. Consequently, the onerous task of nation building wasn’t always left in the hands of the most capable citizens.
This time around, the Abuja rumor mill was abuzz right after Buhari’s inauguration in May with tales of ministerial nominees failing the president’s integrity test. A glimpse of the first batch of ministerial nominees for Team Buhari reveals what political scientists always said about politics – a game of constantly shifting interests and horse trading.
On the Nigerian leader’s ministerial list were five former state governors, namely, Rotimi Amaechi, Babatunde Fashola, Chris Ngige, Kayode Fayemi and Ogbonnaya Onu; a former national chairman of the opposition Peoples Democratic Party (PDP); former state commissioners; seasoned technocrats and the current head of the national oil company. The president didn’t assign portfolios to his list.
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Also on Buhari’s list is Chief Audu Ogbeh, 68, chairman of the PDP between 2001 and 2005. Appointed Minister of Communications in 1982, and later Minister of Steel Development, his term of office was truncated by Buhari’s military coup in 1983.
Another nominee, Emmanuel Kachikwu, was in August appointed group managing director of state oil company, the Nigerian National Petroleum Corporation (NNPC). He is a former executive vice-chairman of ExxonMobil Africa. Within 24 hours of his appointment, Kachikwu received the president’s permission to sack all the divisional heads of the NNPC. His place in Buhari’s economic management team is assured.
Oil exports account for 70% of government revenue. With oil prices dropping below $50 and likely to drop even further when Iran resumes supplies, continuous adjustments in budget benchmarks look certain. The Central Bank has announced a temporary ban on local transactions in dollars. Devalued first in November 2014, and again in February 2015, the Nigerian currency, the naira, still remains under immense pressure as the World Bank continues to counsel for more devaluation. An import dependent economy, a weaker naira will certainly make life more expensive for Nigerians. Analysts say Nigeria is likely to record its poorest fiscal performance in decades this year.
Other folks on Buhari’s list are: Lai Mohammed, a lawyer, businessman and stalwart of the APC; Udoma Udo Udoma, a lawyer, two-term senator between 1999 and 2007 and chairman of several entities, including UAC of Nigeria, Union Bank of Nigeria, Corporate Affairs Commission (CAC) and the Securities and Exchange Commission (SEC); Amina J. Mohammed, the United Nations Secretary-General’s Special Adviser on Post-2015 Development Planning; Kemi Adeosun, a former Commissioner for Finance in Ogun State, western Nigeria; Abubakar Malami; Abdurahman Bello Dambazzau; Aisha Jumai Al Hassan;  Adebayo Shittu;  Solomon Dalong; Dr. Osagie  Ehaneri; Suleiman Adamu; Ahmed Musa Bello; Ibrahim Usman Jubrin and Senator Hadi Serika.
Was the wait for this list worth it? Will this group of ministers, when and if eventually confirmed by the Nigerian Senate, bring a new kind of thinking to the Buhari administration?
Expectedly, the opposition party, the PDP has lampooned the list, saying the president’s proposed cabinet were “a bunch of failed politicians and loyalists who lacked integrity to move the country forward”.
Only time will tell.
<h3>The Faces Of Business</h3>
Babatunde Fashola: The former Govenor of Lagos State did a remarkable job in transforming Lagos over the past eight years. During his tenure, Fashola, a lawyer, boosted infrastructure and made Lagos safer. Based on his track record, Fashola could head the Ministry of Works or the Federal Capital Territory.
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Rotimi Amaechi: The former Govenor of Rivers State was instrumental in getting Port Harcourt back on track during the Niger Delta crisis by securing the city, attracting foreign direct investment (FDI) and developing infrastructure. While in Rivers State, he made education a priority. The Ministry of Education could be a good fit.
Kayode Fayemi: The former Governor of Ekiti State is considered an expert in policy formulation and will be seen as a great asset regarding policy direction and implementation. Fayemi, who has a doctorate in war studies, has also been seen next to Buhari in recent diplomatic visits. He may be chosen for the Ministry of Foreign Affairs.
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Amina Mohammed: She led the Millennium Development Goals (MDG) office in Nigeria. The UN later appointed her in a development capacity role. The Ministry of Health may suit her.
Kemi Adeosun: The former Ogun State Commissioner of Finance made a significant contribution to the development of the region over the past four years. With her background as a banker, she could get a financial position in the next cabinet.
Emmanuel Kachikwu: He was just appointed the Group Managing Director of the Nigerian National Petroleum Corporation. There is speculation that he will be named as a junior minister for petroleum resources, since Buhari made it clear he will manage the oil and gas sector himself.
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A President’s  Search For Political Saints

Winning the 2015 presidential and parliamentary elections will turn out to be the easiest task for Nigeria’s new leaders. Governing Africa’s most populous country will prove more arduous.
Now that the polls have come and gone, Nigerians and the newly inaugurated government of President Muhammadu Buhari must now turn their sights on the hard, serious work ahead: fixing their economy, and the ethical fibers of their multi-cultural society.
This will be no easy task, considering that all eyes (local and global) will be on the retired army general as he seeks to resolve the country’s innumerable social, economic and cultural dilemmas.
“This country has to be fixed&#8230; with the engine running,” Buhari’s Vice President, Yemi Osinbajo, told a gathering of media and business folks in Lagos last April.
No doubt the Nigerian nation continues to be a “disappointing case” despite its crowning as Africa’s leading economy, and despite its abundant resources.
Now, when I say “disappointing case” I do not mean to belittle this GDP badge of honor. I merely want to remind you that (most) Nigerians lack access to potable water, electricity, internet access, affordable housing, quality healthcare, quality education and efficient public transportation, just to list a few things on the development agenda.
“We are actually bleeding on many fronts,” a friend working in the Office of the Chief Economic Adviser to President Jonathan admitted to FORBES AFRICA. “Yet we keep behaving as if we are a Saudi Arabia, which has a bigger economy several times the size of Nigeria’s.”
Nigeria is a classic case of the Dutch Disease syndrome, a term coined in 1977 by The Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of the large Groningen natural gas field in 1959. This was around the same time Nigeria also began to export oil from its Oloibiri oil fields, in the creeks of the Niger Delta. Sadly, instead of growing in significance and wealth, Nigeria’s Niger Delta communities have become desolate and impoverished.
In recent times, declining oil prices have had a debilitating effect on the country’s earnings. Nigeria however continues to behave like a wealthy czar, overspending, undersaving and underinvesting.
Revamping the ethos of business and governance should be top priority for Nigeria’s new economic and political managers. Under the previous administration of President Goodluck Jonathan, the country’s petroleum sector became synonymous with corruption and murky corporate governance.
Crude oil prices ($115 per barrel in June 2014) now stand around $60. National revenues have declined by 29% over the last nine months. Decades of not saving enough and not investing enough in the economy have now caught up with the nation.
The IMF has called for a further devaluation of the naira, the national currency, which had already depreciated by 23% between November and March. Citizens at the bottom of the pyramid and small business owners across the country disagreed with this advice. Nigerians would prefer a peaceful nation; productive refineries and infrastructure; reforms that restore the professional dignity of the civil service, the police and other public service providers; pragmatic housing programs; deeper financial and economic inclusion and a drastic reduction in the size of government.
In a nutshell, this is the broad agenda for Nigeria’s new government. Nigerians can however be impatient. It will certainly take more than one election cycle (four years) to fix all of the nation’s economic and social woes. A few months is all we need to gauge if the change Nigerians desire will begin to happen under the old general.
Known as a frugal man with little penchant for frivolities and material acquisitions, it will be interesting to see how he attenuates Nigeria’s widespread culture of nepotism. Which brings me to another matter: state sponsorship of religious activities, events and pilgrimages.
Saudi Arabia made $18.6 billion and $213 billion from pilgrimages and oil exports, respectively, in 2014. Israel recorded 3.54 million tourist arrivals in 2013. The statistics for Nigeria’s tourism sector are nowhere near these levels. Which begs the question: who benefits more from religious tourism – is it the citizen, the state or religious institutions?
The agenda for Buhari’s team is certainly not a boring one.

the general must stop  The bleeding

Elections in Africa tend to be associated with security and political risks. This year has seen a number of important national elections in sub-Saharan Africa. As several African countries take turns to go to the polls, individuals and organizations cannot afford to ignore the investment risk that comes with it.
For investors, political risk can simply be defined as the risk of loss due to changes that occur in a country’s government or regulatory environment. This could arise from the expropriation of assets, a new president or prime minister, a change in the country’s ruling party, or change in existing legislation or introduction of new laws.
It is well known that political stability is a prerequisite for economic stability; without it, policy initiatives and structural reforms can stagnate, decision-making becomes sluggish at best, and investor confidence begins to ebb as investors naturally seek safe havens for their investments.
Where there are high levels of unemployment, currency devaluation, an air of insecurity and political uncertainty, it is easy to become discouraged and anxious. Even though some of these situations are uncontrollable, you can be proactive about taking charge of your financial life and putting measures in place to minimize your risk.
To navigate the uncertainty that political risk presents, especially when important elections are coming up, try to familiarize yourself with the candidates, their political parties and their economic policies and plans. These may have a direct impact on your personal finances.
During periods of uncertainty, the natural tendency is to sit on the sidelines and stay out of the markets. Yet, uncertain times and volatile markets usually present opportunities for those who are well positioned to take advantage of them. For example, asset values, including stock, and real estate may sell below their true value as a country experiences capital flight.
Diversification is a tried and tested method for mitigating the effect of political risk. As the old adage ‘don’t put all your eggs in one basket’ reminds us, if you put all your money in one investment, your return will depend solely on the performance of that investment. Diversification spreads your risk across various asset classes, including cash, money market accounts, stocks and real estate as they tend to respond to market vagaries and financial conditions differently.
Beyond diversification across asset classes, consider diversifying assets across jurisdictions. Limit your exposure to single country risk by having a mix of domestic and international investments; that way even if the measures you have put in place to reduce your exposure to political risk prove to be inadequate, you have a better chance of limiting the damage to your portfolio.
It is not possible to avoid political risk altogether. Whether you manage your financial affairs by yourself or use the services of a professional, you are still susceptible to risk as all forms of investing come with a degree of uncertainty. You do need to familiarize yourself with the various risks associated with the markets in which you invest so that you can reduce your exposure by adjusting your investments as appropriate. Ultimately, you are responsible for your money.
For those that crave a level of certainty and predictability, the need for having a sound long term financial plan in place becomes more glaring than ever, and is key to financial security. If you stay focused on your goals, you are less likely to be swayed by market hype, volatility, inflation, devaluation, insecurity and political uncertainty and more likely to come out relatively unscathed when the climate begins to change.
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Political Risk And Personal Reward

It’s a new season these days in Africa’s largest and most populous economy. A new broom has come to sweep away old problems.
Nigeria’s 2015 elections have come and gone. Hell, after all, did not break loose.
The elections were not without blemish though: while most international observer groups gave a clean bill to the nation for a mostly peaceful exercise, locals might have had a slightly different experience. There were pockets of electoral malpractice and a few politicians and professional miscreants created temporary panic, threatening to kill the peace. But by and large, the soul of the nation sailed peacefully through its most introspective moment in history.
Every migraine that Nigeria experiences is an African problem.
The elections were therefore a democratic tonic for Africa. It set a good precedent for scheduled elections across the continent this year: Ethiopians are expected to go to the polls in May; Burundi, Central African Republic, Guinea and Somaliland (June); Togo (July); Cote d’Ivoire and Tanzania (October). Voters will also elect new leaders in Ghana and Cape Verde in 2016.
The Nigerian economy is responsible for a quarter of the investment flux on the continent. Nigeria’s infrastructure ecosystem is 50 years behind schedule, but this has not stopped the world from doing business with Nigeria.
Hope has thus been revived. But so much needs to be done. The sheer size of the population showcases the depth of development work needed to turn this huge national engine around. Transforming Nigeria into a fast developing economy in the mold of Malaysia, Singapore, Brazil and Turkey will require consolidated efforts of national reconstruction by Nigerians and friends of Nigeria across the world.
Despite the inadequacies of their motherland, Nigerians are a vibrant, boisterous lot. This positive psychology will need to be funneled into rebuilding their nation. The decrepit healthcare, education, law and justice systems need urgent transfusion.
The arrival of the largest opposition party in Government House is providing Nigerians with an opportunity to recalibrate their expectations against the backdrop of perennial under-delivery by previous civilian administrations in power since 1999.
Prior to 1999, several military régimes governed the country for 16 years. So, if 16 years of military rule stunted growth and socio-economic development, one must then ask the question: how well has Nigeria fared after 16 years of democracy? The answer to this question is obvious. Nigeria has experienced some measure of economic growth mixed with little development and plenty of disappointment.
The verdict is simple: outgoing President Goodluck Jonathan’s Transformation Agenda was hobbled by graft and nepotism, and past leaders before him failed woefully to entrench pervasive prosperity, which is the point of economic development.
Appraising the Jonathan presidency, Patrick Utomi, professor of political economics at the Lagos Business School says: “One of the biggest mistakes this president has ever made is to suggest that the ownership of private jets is an indicator of Nigeria’s progress. It is a terrible thing. I was praying hard after he said it the first time that he should realize he made a mistake; but he repeated it several times during the World Economic Forum and I was so embarrassed. I said, ‘Oh my goodness, we need help.’ That has been their orientation, they have not noticed that the Nigerian people are actually (poor).”
Nigerians are indeed poor. Most do not feel an ounce of the wealth that surrounds them in the form of flashy cars; business, military and political elites attending bumper parties in exotic locations; the growing culture of wine and champagne consumption; overnight millionaires flaunting their ill-gotten loot, many with personal police escorts; and members of the middle class constantly travelling overseas for annual vacations.
“Nigerians remain hopeful that the incoming government will bring positive changes to their lives,” says Pretty Okafor, President of the Performing Musicians Employers Association of Nigeria (PMAN). “Nigerian music and movies is currently uniting Africa and unleashing creativity across the continent. Our politicians just have to build on what the Nigerian entertainment industry has been doing over the last 10 years – allow private enterprise to flourish and watch the market explode with positive results.”

The Economy Doesn’t Need Private Jets To Fly

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There was a time when what happened in Westminster mattered, when British ballot boxes set the scene for the world.
In 1900, when the Labour Party competed in its first general election as the Labour Representation Committee, the British Empire covered a quarter of the globe and the lives of 383 million people were effectively governed from London.
Labour only won two seats in that first outing but it grew rapidly and went on to form 14 governments between then and 2010, completely overshadowing the Liberals, which had challenged the Conservatives for ascendancy in the 19th century. The Liberals eventually became the Liberal Democrats after merging with the Social Democratic Party in 1988.
The British Empire is long gone and aggressive new political parties have put Britain’s two-party political system to rest. In 1950, the Conservatives and Labour won 90% of the vote, but in 2010 they garnered just 65%, according to Professor Paul Whitely of the University of Essex’s Department of Government in an article in news and analysis website, The Conversation.
The recent recession and the re-emergence of nationalism as a potent political force has left Britain with an increasingly restive population which is looking inwards and demanding that politicians do the same.
The reality being hammered home is that all politics is local, a phrase made famous by American politician Tip O’Neill in the 1930s.
Economic recovery, living standards and rising inequality, public health, employment and, importantly, immigration were being grappled with in the build up to the May 7 polls.
Helping other countries to grow and making the world a fairer place is generally far down the list, if it makes it onto the list at all.
Going into the elections, the Greens were the only party tackling international affairs with enthusiasm. Given their view that trade and economic growth must be curbed, it is a good thing for Africa that their influence is likely to be minor.
At the time of writing, it was highly likely that neither the Conservatives nor Labour would win the 326 seats needed for an outright majority and almost certain that both would fall far short of the 340 seats necessary for a ‘working majority’. This makes a minority government propped up by a deal with one or more of the smaller parties very likely. The travails faced by the coalition formed by the Conservatives and the Liberal Democrats in May 2010 makes such an arrangement less attractive. The deal left the Liberal Democrats a shadow of what it was and has weakened the Conservative Party’s claim that it was the sole driver of the economic recovery.
Growing political insularity and the likely outcome of the polls returning no clear winner means that while existing trade and foreign aid commitments will be honored, major new concessions or bigger contributions are highly unlikely.
This means that the outcome the British election will not be felt – either positively or negatively – in Africa.
But before we judge Britain too harshly for this and criticize it for not doing more, it should be borne in mind that last year Britain spent £11.4 billion – or 0.72% of GNP – on overseas aid, becoming the first major economy to meet the United Nation’s 45-year-old aid spending target, according to The Guardian.
Expecting its politicians to do more, especially when times are tough, is simply unrealistic.

Africa Far Down The List

Perceptions matter. They drive investors’ sentiments, helping to shape market forces and the state of the economy.
In Africa, perceptions and reality often merge into one homogenous picture: a continent of 55 nations constantly struggling with underdevelopment, graft, poverty, political instability, wars, capital and human flight, epidemics, fiscal quandary and general socio-economic disorder. There is, however, a time in the history of a nation when the harsh, sour, reality of its national condition begins to succumb to political inoculation.
For Nigeria, it would appear that time has come.
Nigeria may not have met all of the UN Millennium Development Goals by the end of 2015. Its economy may also be at its lowest point ever. Savants of African political economy will remember 2015 as the year Africa’s most populous nation replaced its culture of political acrimony with a new set of democratic ethos, underpinned by the will and wishes of its citizens.
One political party, the People’s Democratic Party (PDP), has governed Nigeria since 1999. For the first time since independence in 1960, a democratically elected administration in Nigeria will be handing over power – in May – to another democratically elected political party, the opposition, All Progressive Congress (APC).
All things being equal, this seamless transition should rekindle investor confidence in the economy and once again place Nigeria on the radar of the global community – this time for positive reasons.
Goodluck Jonathan, in power since 2010 and perhaps Nigeria’s most vilified leader, will now go down in history as the first major presidential candidate in Nigeria to accept defeat while results were still being announced. And suddenly that ne’er-do-well image, that has defined the world’s view of Nigeria, may have begun to change for good.
Nigeria has had 55 years of arrested development. Governments have failed to build savings buffers. Hobbled internally for so long by ethnic and religious strife, the global view of Nigeria has been defined by its ignoble contradictions: a youthful population, which means it is a commercial Eldorado in the making; economic underperformance and the slow pace of development despite the country’s abundant human and material resources; and despite all these, the consistent positive contributions of Nigeria to the global humanitarian, scientific, economic, and cultural order over the years.
The do-or-die perception created by Nigeria’s political gladiators over the last 12 months did not help. Preoccupied by power games, they heated up the polity and created an atmosphere of apprehension and discomfort. Governance and economic management took a back seat. The dominant mood across the nation was gloom. Domestic and international investors held on to their pockets, watching and hoping that Nigeria Inc. would not self-destruct.
The postponement of the elections to March and April 2015 further ruffled already frayed nerves. Speaking to the Britain’s Guardian newspaper, Nigeria’s only Nobel laureate, Professor Wole Soyinka described the build-up to the elections as the most vicious, unprincipled, vulgar and violent he had ever witnessed.
“This one was like a no-holds-barred kind of election, especially, frankly, from the incumbency side. One shouldn’t be too surprised anyway given the kind of people who are manning the barricades for the incumbent candidate,” said Soyinka.
He said the elections were “most expensive, most prodigal, wasteful, senseless, I mean really insensitive in terms of what people live on in this country… And of course the sponsoring of violence in various places, in addition to this festive atmosphere in which every corner, every pillar, every electric pole is adorned with one candidate or the other, many of them in poses which remind one of Nollywood. I just hope we won’t go down as being the incorrigible giant of Africa.”
Soyinka’s worst fears now seem like a mirage. Eventually, the president suffered an electoral loss and secured a moral victory, helping to enthrone peace in his motherland much to the relief of the international community.
Sources within the Presidency confirmed to FORBES AFRICA that Jonathan was cajoled and encouraged by one past Nigerian military leader, an influential cleric and members of the international community including Ghana’s former president, John Kufuor, to throw in the towel.
The immediate verdict on the impact of the Jonathan presidency on business and the economy has been somewhat complimentary. Fisayo Soyombo, editor of The Cable, an online newspaper, believes that, “in the final analysis, history will be kinder to Jonathan than his underwhelming four years deserve – because he will not be remembered as the one who made life difficult with fuel price increases less than a year into his tenure; or the one under whose watch Boko Haram blossomed; or the one in whose time the naira fell to its all-time low; or the one in whose care billions disappeared without consequence; or the one who granted state pardon to one of Nigeria’s most notorious and ignominious public-office thieves. Jonathan will be remembered as the first civilian president to peacefully hand over power to another. That, matter-of-factly, is an undeservedly glittering end to what has been an unflattering four years.”
So, what do Nigerians and the rest of the world require from the incoming managers of Africa’s largest economy?
International investors and business folks with entrenched interests in the economy had secretly hoped that Jonathan’s main challenger, the 72-year-old retired army general Muhammadu Buhari, who was Nigeria’s head of state between late 1983 and 1985, would lose. The rationale for this was business continuity and perceived instability that a change in government might bring.
Nigerians however cared less about business continuity. Their choice of the APC was a vote for transparent and prudent governance. We need a seismic shift in the style and character of governance, says Olu Akanmu, a policy and public affairs commentator.
“A prudent government under the current situation is critical… We do not need 40 ministers and hundreds of special advisers and assistants,” Akanmu says, hinting at the need for Nigeria’s new leader to revamp the executive and legislature.
Nigeria’s public sector costs have been adjudged to be one of the highest in the world relative to the size and productive output of economy.
Inevitably, Buhari must now begin to govern a nation riddled with a despicable culture of corruption. No easy task in a nation brimming with politically connected moguls, many of whom might have supported his bid for the nation’s top job.
Buhari’s campaign was based on change. Winning the election with this anti-corruption mantra was the easy part. Leading and fulfilling the expectations of this potentially wealthy but impoverished country will be harder. Change will not happen overnight. Crude oil accounts for over 80% of Nigeria’s earnings. Crude oil prices have stalled below the $50 per barrel mark for months. Nigeria’s foreign reserves have been depleted to around $30 billion, an all-time low barely enough to cover four months of imports.
For years, the APC reveled in lampooning the policy decisions of the PDP-led government. Now, they will be taking over the unfinished business of fixing education, healthcare, unemployment, power, police-community relations and the huge infrastructure deficit. They have the next four years to succeed or fail.
Nigerians should also expect to say goodbye to some of the brilliant technocrats in the outgoing PDP-led administration, including Ngozi Okonjo-Iweala, Finance Minister since 2010 and a renowned economist who is respected around the world.
She struggled with ‘political forces in power’ to instill a savings and investment culture throughout her tenure and has absolved herself of responsibility for the failure of fiscal policy over the last six years. As the economy faltered, her club of admirers became increasingly critical of her views.
Jide Akintunde, editor of Financial Nigeria magazine, believes that real economic change will require accelerating reforms and deepening the gains of the last decade, especially in the key petroleum, services and agriculture sectors.
“Nigeria’s potential is currently locked in agriculture. The potential here needs to be unlocked. With more investments in the agriculture value chain, we will save more money, grow external earnings, create more sustainable jobs.”
A source in the Johannesburg office of the International Finance Corporation (IFC), the private sector lending arm of the World Bank, told FORBES AFRICA that international investors will be watching Nigeria closely over the next several months.
“A new party in power, no matter how well intentioned or how well prepared, always has a lot to learn,” says the source.
Buhari and his team will need to win the confidence of his nation and the international community quickly.

Nigeria’s shot in  the arm

Boko Haram’s latest victim may have been Nigeria’s national elections.
Citing security concerns as reason for postponing the nation’s February general elections by six weeks, the Nigerian authorities have once again succumbed to the bogey of insurgency and insecurity bedeviling Africa’s largest and most populous economy.
The elections will now be held between March 28 and April 11 this year. National Security Adviser, Sambo Mohammed Dasuki, says the government will flush out the terrorists in six weeks. It was a shaky excuse. Nigerians are watching; waiting to see what security magic government will weave in six weeks.
The postponement has near and far reaching implications for the nation and the rest of Africa.
Professor Attahiru Jega, Chairman of the Independent National Electoral Commission (INEC), had previously maintained the commission’s readiness to conduct free and fair polls. Now INEC’s independence and neutrality is being questioned. According to media reports, government may even be shopping for a new, more compliant chairman for the commission.
If this happens, it will translate to political chicanery and serious credibility worries for INEC and the incumbent administration, which funds the commission. The fear that even the new election dates may not be sacrosanct is palpable. Constitutionally, federal and state-wide swearing-in of elected officials must be held on May 29. Observers have called this unfolding scenario a looming coup against democracy in Nigeria.
A prolonged political crisis in Nigeria would further harm efforts at national harmony and stall trade and investment in West Africa, already hit by the Ebola crisis, insurgencies in northern Nigeria and Mali, a democratic interregnum in Burkina Faso, poor external trade balances, fiscal deficits, weakening currencies and mass unemployment.
For most of 2014, Africa’s global image was defined by the Ebola epidemic, despite the scourge being confined to a few countries in West Africa.
Ignoring Africa’s rising middle class, the epidemic revealed the specter of a failing continent,  with poor sanitation, poor health budgets, poor health education, poor medical inventories, poor infrastructure, an entrenched culture of graft and official disregard for society’s commonwealth.
Nigeria’s democratic debacle will therefore be an ignoble chapter in the history of Africa.
For the last 30 months or so, the rest of the world struggled to empathize with Nigeria over its inability to curb the despicable rein of the Islamist fundamentalist group. Boko Haram has made the Sahel forest region around the Lake Chad basin its homestead, launching sporadic attacks into northern Nigerian cities and towns at will; making a mockery of Nigeria’s national security and defense systems. Huge sections of north eastern Nigeria have thus been rendered comatose and ungovernable.
A regional diplomatic initiative involving the governments of Chad, Cameroon and Nigeria failed to plug the onslaught. Indeed the group has become bolder. Last month, Boko Haram threatened to ‘deal with and defeat’ an African Union anti-Boko Haram special force. The group has unleashed more mayhem on northern Nigerian towns even after it kidnapped over 200 teenage girls from their Chibok village school in April 2014.
The political season began last autumn and soon, it would seem that the world had moved on from the sad case of the Chibok girls and the #BringBackOurGirls social media campaign. The conscience of the nation was on the chopping block. Also on the chopping block were investor sentiment and market forces. Agriculture and the automobile industry welcomed new investments in 2014; in the same period, the Nigerian Stock Exchange saw its market cap decline by $8.5 billion, a 13% drop.
Slumping oil prices forced the finance ministry to lower its economic projections for 2015. This year’s national budget was consequently slashed by $3 billion. Nigeria has never saved for the rainy day, largely due to politicians who earn stupendous salaries and allowances and insist on appropriating proceeds from the reserve Excess Crude Account (ECA). Nigeria’s four petroleum refineries operated at less than 50% of their installed capacity between 1985 and 1999 and have remained dormant since then. Parochial politics and economic perfidy has ensured that no new refineries were built in over 30 years.
If business is a natural extension of politics, then it is easy to see why Nigeria Inc. will continue to underperform. The consistent heating of the polity and absence of truth in practically all spheres of Nigerian life is a key hindrance to progress. The system resists reforms. Governance is driven by regional and religious sentiments. The current political class offers little hope. With little or no ideological difference between political parties, defections across party lines is the order of the day. It would therefore seem that principles have no place in Nigerian politics.
With a raft of political parties, presidential and governorship candidates vying for office, this will be the country’s most hotly contested and most expensive elections ever – complete with rented crowds, political hubris and multi-million-dollar media blitz. Nigeria’s cash-and-carry political culture was fully at work.
The late Chinua Achebe once quipped that the problem with Nigeria was Nigeria. The master storyteller would be turning in his grave now, as his beloved nation treks further away from established democratic ethos.
The protracted survival of Boko Haram is a national embarrassment and a scandalous testimonial for leadership in Nigeria. It reflects the failure of the social contract between government and the governed. And as the world prepares to replace the Millennium Development Goals with a new set of goals and priorities this year, Nigerians will also be desperately seeking to replace the mirage of hope with tangible political and economic achievement.

A Coup Against Democracy?

Joyce Banda is wearing a cheerful fuchsia-pink chitenge (Malawian dress), but looks tired.
We meet her in a Johannesburg hotel, where she has been staying on the return leg of her six-week trip – the longest she has been away from Africa – to the United States (US).
“The last few weeks have been hectic,” says Banda, Malawi’s former president and Africa’s second female head of state.
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In the US, she had been rubbing shoulders with Hillary Clinton and Archbishop Desmond Tutu, garnering support for the Joyce Banda Foundation, which she has been running on behalf of women and children in Malawi for the last 16 years. In Johannesburg, she also met with Graça Machel, wife of the late Nelson Mandela, to discuss a maternal and child health program.
Back home, it was an equally hectic few months. In a year Malawi is celebrating 50 years of independence, the international press scrutinized it over a high-level graft scandal and chaotic elections.
Banda left Malawi a month after her country’s closely-contested – and controversial – May elections, which saw her and her People’s Party lose to Peter Mutharika of the Democratic Progressive Party (DPP).
Banda was president of the tiny aid-dependent southern African country – among the world’s poorest – for a brief two years, following the death in office of her predecessor Bingu wa Mutharika, the brother of the new president.
“I came into office at a very difficult time. The economy had almost collapsed, but in 24 months, I was able to turn [it] around,” says Banda.
Banda says Malawi’s economy grew from 1.8% in 2012 to 6.2% in 2014. She started well, winning accolades from the West for her economic reform plan and austerity measures, including the IMF-backed devaluation of the kwacha.
“What gives me pride is I left Malawi a better place than when I found it. When I came… we didn’t have fuel for a day, companies were scaling down… I had to work very quickly… By the time I was leaving statehouse, we had a harvest of 3.9 million metric tons. Companies were operating at 85%. We had a forex cover of three-and-a-half months [from a week]… We had fuel for 15 days at any given time… The one thing I wasn’t aware of when I came into office is there was so much corruption, and that corruption affects the gains you make.”
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Banda claims she started the fight against corruption, revamping Malawi’s financial management system, which she says led to 68 arrests and 30 frozen accounts.
The corruption scandal, or Cashgate, saw senior government officials in Banda’s administration charged with misallocating funds. According to Baker Tilly, the British auditors hired by Banda with financial support from the British government, the state was defrauded of about $32 million, almost 1% of Malawi’s annual GDP, between April and September 2013.
But Banda says the financial system was abused by previous governments, dating back to 2001. She knew bringing it to light was not going to be easy.
“I was warned by colleagues across the continent it’s not easy to fight corruption… because you are fighting very powerful people who are benefitting from that kind of money, and if you are not careful, you will get smeared on, be fought through and through, dragged to the ground…,” says Banda.
“I decided to go back to 2010 and 2011, as I saw the benefit of us finding the truth, [as] that is the only way to move forward. The audit reports together with the K6 billion ($15 million) stolen while I was in office, and the K92 billion ($232 million) [from her predecessor’s time] are before parliament now. The good news is that the current president has also decided to go ahead with the fight against corruption,” says Banda.
The May elections brought more grief.
In the aftermath of the polls, which she alleged were rigged, there was a point when she says she had to take responsibility, call for a recount, step aside from contesting, and concede defeat.
“People have asked me, why did you not contest, why did you concede, when the Electoral Commission had also announced there was rigging? I felt it was important for me to allow peace to prevail. I have always said Malawians come first, this was an opportunity for me to demonstrate that. Malawians must have a leader of their choice, but Malawians should also not shed blood. There is life after statehouse and so much more I can do. So I chose to concede, and have no regrets.”
The buzz in Malawi now is what’s next for Banda? Will she return to politics or philanthropy?
Banda says she will continue championing women’s rights not just in Malawi but across Africa, and since her arrival in Malawi, has been involved with projects through her foundation.
Questions abound about her political future.
“There is a sense of deja vu, with the forex situation worsening by the day, and the kwacha weakening against the dollar and other major trading currencies, many fear that a repeat of fuel shortages that characterized the DPP government may come again. That coupled with the failure to meet some campaign promises may push Joyce Banda’s popularity up,” says Mabvuto Banda, a Malawi-based journalist.
There has also been speculation she might be charged for Cashgate.
“Interestingly, the Attorney General Kalekeni Kaphale [in August] lauded Joyce Banda for laying the foundation for the fight against Cashgate but he was quick to say more still needs to be done to effect more arrests. He also warned there will be no sacred cows, a statement that may have fueled speculation JB will not be left out,” says the reporter.
“Joyce Banda has a lot of powerful friends outside Malawi but it’s very difficult for me to see how she could be indicted when clearly many would interpret the indictment as trying to victimize her.”
“When you are innocent, when you are fighting for the people, prosecution does not matter,” Banda had said in Johannesburg, days before her return home.
“If I write a book about my life, it will be volumes and volumes. I want to write one book that [tells] any African woman reading it that [you] can be at the lowest in [your] life and bounce back. In my life, I have been down four times. Every woman who reads my book will know that when you fall, you get up, and run again.”

‘Malawians Should  Not Shed Blood’

The Mandela Moment
It was Winnie Mandela’s first public appearance after the death of her former husband Nelson Mandela in December. Arriving at Orlando High School, she was welcomed by cheering crowds, African National Congress officials and photographers as she made her way through the gates ahead of the line and into the voting station. Mandela, seen here with South Africa’s Minister of Mineral Resources Susan Shabangu, left as quickly as she came, rushing off to Bekkersdal, where incidents of violence had been reported on the eve of the elections.
‘My Vote Is My Vision’
Twenty-year-old Bridgette Mashile cast her vote at Jules High School.
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“I just couldn’t wait to mark ‘X’ on the ballot paper because I already knew which political party I was voting for when the day finally came. Voting for the very first time has really had an impact on my life. The ink on my finger is good proof that I am now old enough to make my own decisions, especially how I would like my country to be run.”
For Madiba’s Legacy
The fact that she is blind did not stop 52-year-old Elizabeth Malebo of Alexandra township from participating. Malebo is grateful for the social grant she receives every month.
“Before 1994, black people were deprived of so many opportunities but the people who suffered the most were those living with disability like me.  I will continue to vote in honor of Madiba’s legacy.”
Grateful For Democracy
Patricia Abrahams, 53, has never missed a chance to vote in the past 20 years and is grateful for the opportunities of democracy.
“It is always the thought of the sacrifices of our late president, Nelson Mandela, that encourages me to vote. Apartheid had deprived us of the opportunities we now enjoy. I live in a previously so-called ‘white neighborhood’, an opportunity my parents’ generation never experienced. As an arthritis patient, I have the right to better medical treatment at any hospital without being discriminated.”
The Mandela Moment
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It was Winnie Mandela’s first public appearance after the death of her former husband Nelson Mandela in December. Arriving at Orlando High School, she was welcomed by cheering crowds, African National Congress officials and photographers as she made her way through the gates ahead of the line and into the voting station. Mandela, seen here with South Africa’s Minister of Mineral Resources Susan Shabangu, left as quickly as she came, rushing off to Bekkersdal, where incidents of violence had been reported on the eve of the elections.
‘My Vote Is My Vision’
Twenty-year-old Bridgette Mashile cast her vote at Jules High School.
“I just couldn’t wait to mark ‘X’ on the ballot paper because I already knew which political party I was voting for when the day finally came. Voting for the very first time has really had an impact on my life. The ink on my finger is good proof that I am now old enough to make my own decisions, especially how I would like my country
to be run.”
For Madiba’s Legacy
The fact that she is blind did not stop 52-year-old Elizabeth Malebo of Alexandra township from participating. Malebo is grateful for the social grant she receives every month.
“Before 1994, black people were deprived of so many opportunities but the people who suffered the most were those living with disability like me.
I will continue to vote in honor of Madiba’s legacy.”
The Art Of War 2.0
In the run-up to the recent South African elections, social media emerged a winner.
When Sun Tzu penned The Art of War, he probably had South Africa’s 20th democratic elections in mind. Never has the importance of military positioning been more important. Forget the rallies, the posters, the promises and speeches that either roused emotion deep in our bellies or left us reaching for the mute button. This war was not just about these traditional weapons of battle but for the first time saw political parties enter the social media ring in a fight for followers, likes, and retweets.
The dust has now settled. The bruised, the battered, and the victorious have claimed their places. South African political parties have certainly latched onto the hype of social media with the top four performers in the election, the African National Congress, Democratic Alliance, Economic Freedom Fighters and Inkatha Freedom Party, all ramping up their online artillery in the build-up to the elections.
The social media whirlwind has been an unmatched phenomenon that has changed electioneering tactics forever. It’s hard to believe that in 2007, when Barack Obama first made his presidential intentions known, iPhones did not exist, Twitter was the new cool kid on the block and Facebook had a mere 50 million users. It shouldn’t come as a surprise then that the ‘twittersphere’ has proven to be a reflection of national opinion and that Facebook has become the go-to space to talk party policies and how they are intended to shape our future.
South African political parties have woken up to the fact that in addition to posting the last weekend’s party photos, young people are gravitating to social media to voice their political opinions. The unwritten rules of the social media game open up a space for peer-to-peer engagement (arguably the most effective tool of influence), where the playing field is leveled in 140 characters, and where thought-leadership is not the preserve of a handful of insiders.
For the technophobes who haven’t embraced social media yet, consider this: Johannesburg has the highest number of Twitter users in Africa. South Africa has consistently recorded on average 100,000 new Twitter users every month in the past three years. In the 2008 elections, Obama claimed 70% of all the votes of people under the age of 25. According to the United Nations Population Fund, 88% of young people in South Africa have access to a landline, a mobile phone, or the Internet. You do the math. Social media in electioneering has very little to do with technology and everything to do with social behavior.
Like a first date, our political parties’ soirée with social media has been hesitant and somewhat cautious. As we build up to 2019, political parties that are the keenest to get to second and third base will be building their social media budgets, finding the right expertise, and ultimately claiming more virtual and ballot box votes.

The Poll Picture

Guinea, a mining capital in West Africa, faces great economic problems as it heads into parliamentary elections next month. The country faces ethnic tensions, threats to democracy and economic instability.
When it comes to resources, Guinea could be regarded as one of Africa’s richest countries. Rich in minerals, hydropower and agriculture, Guinea also holds almost half of the world’s bauxite as well as substantial amounts of iron ore, gold and diamonds. These resources remain under exploited.
Reforms are underway with tighter monetary policy and budget. According to the African Economic Outlook, in 2011 the Guinean economy progressed after the return to constitutional government. This saw real GDP peak at 4%. Despite government’s strict budget policy and determination to curb credit, inflation remained at a high of 21.2% in 2011. It is predicted to drop to 10.1% in 2013.
The International Monetary Fund (IMF) and World Bank’s International Development Association (IDA) have supported Guinea in its effort to gain debt relief. Combined, the IMF and IDA contributed $2.1 billion to the country in 2012.
In October 2011, the African Development Bank (AfDB) backed 77 Guinea operations which were worth approximately $818 million. These operations included: 58 projects, nine studies, seven institutional support operations and three non-project loans.
With the economic challenges faced by Guinea, this year’s elections will be regarded as a beacon of light for the country and will hopefully bring change to the nation. The eyes of the world will be on the country as they vote for their president.
President Alpha Condé, 75, was elected in 2010 in the first credible democratic elections since the West African nation gained independence from French rule in 1958, but parliamentary elections that would see Guinea’s full transition to civilian rule have been delayed for almost two years. The vote was originally scheduled for May 12 but elections have now been delayed until June 30, 2013.
In late February thousands of supporters of the leading opposition party, Union des Forces Démocratiques de Guinée (UFDG), took to the streets accusing Condé and his ruling Rassemblement du Peuple Guinéen (RPG) of attempting to rig the vote. Nine were killed in clashes with security forces and hundreds injured in the riots. The UFDG is backed by the Peul, the largest ethnic group in Guinea, whose supporters accuse Condé’s government of politically favoring the Malinke, the second largest ethnic group in the country.
With the opposition walking out of talks with the government that were organized in the aftermath of the violence, and calling for further protests and strikes, international observers are concerned that Guinea could further descend into violence and derail the nation’s journey to democratic rule.
Guinea’s main opposition leader, Cellou Dalein Diallo, who lost to Condé in a tight presidential run-off in November 2010, said the opposition would do everything to stop the election if it was held without them, according to a report by Reuters. Analysts say this is a troubling sign.
Vincent Foucher, a senior analyst for West Africa at International Crisis Group told FORBES AFRICA that the political standoff could setback Guinea’s economic gains.
“If they blow this one there is a very serious possibility that people in the armed forces could say, ‘You politicians are not able to handle those democracy things so we [will] step back in,’ and that would bring us back to 2008 which would be a real shame,” says Foucher.
He adds that basic consensus on the electoral process must be achieved for the elections to go ahead.
“The situation is so tense that I do not believe that full consensus is possible.”
Ahmed Sékou Touré, Guinea’s first president, was a firebrand socialist who rejected Charles de Gaulle’s offer of integration into the Franco-African community. Touré ran an authoritarian government for over 20 years in which torture, arrests and executions were commonplace.
After an unsuccessful invasion led by Portuguese Guinea, now Guinea-Bissau, Touré became increasingly paranoid, accusing the Peul population of attempting to overthrow the government. After his death in 1984, a group of army generals staged a military coup and Lansana Conté became president, and was followed by Moussa Dadis Camara in 2008.
Guinea came into the international spotlight in the aftermath of the September 28, 2009 massacre of some 150 opposition protestors and the rape of more than 100 women by security forces during the military regime of Dadis Camara. The International Criminal Court is currently investigating the case but Human Rights Watch has said the government needs to do more to bring those responsible to justice.
Due to mounting international pressure, Guinea held its first democratic presidential election in 2010. International observers deemed the elections free and fair but they were marred by ethnic rivalry and clashes between civilians and security forces.
Foucher says there have been significant moves away from the tyranny and turmoil of the past but that Guinea still has a long way to go.
“There are some interesting developments and you could say there is a dialog about electoral institutions.”
In addition to its bauxite reserves, Guinea has large iron ore, gold and diamond deposits and has long been on the radar for international investors and multinational mining companies. Upon taking office, Condé promised to redevelop the mining sector and review existing mining contracts signed under previous military dictatorships.
In 2011, Condé revised Guinea’s mining code to allow the government to take a minimum of 15% of shares in mining companies operating on its soil, with an option to buy a further 20%. The government has set up a review body to look into previous mining contracts and overhaul the mining code that determines the role the state plays in governing the industry.
Resources watchdog Revenue Watch Institute, funded by billionaire George Soros, is advising the Guinean government on transparency and how to better negotiate with large mining companies. Leading development economist Paul Collier is also an advisor to the government and Tony Blair’s Africa Governance Initiative has a presence in the country.
In an interview last year with The Guardian, president Condé, a former pro-democracy activist, said he would be “The Obama and Mandela of Guinea” and that he would transform the nation into a stable and developed democracy. But analysts say Guinea’s future stability will largely depend on his ability to negotiate with the opposition and build trust around the electoral process.
Guinea is emerging from a long period of political instability and the socio-political situation remains uncertain. Political differences concern the future of the electoral process and financial and logistical problems.

A Test For  Guinea’s  Fledgling  Democracy

As Zimbabwe gears up for elections later this year, there is optimism following a successful referendum signing for a new constitution. The referendum, which limits future presidential candidates to two five-year terms in office and allows for their removal if they are found guilty of serious misconduct, violate the constitution or are physically or mentally incapacitated. At least two million people cast their vote in the referendum on March 16.
The agreement is seen as a signal for investors to return to the mineral-rich country, which has been struggling for years. During a conference held over two days in Boksburg, South Africa, a delegation of high ranking Zimbabwean officials gathered to sell their country to investors.
It was led by deputy prime minister and famed rocket scientist Arthur Mutambara and the minister of economic planning and investment promotion, Tapiwa Mashakada. The aim was to lure investors and allay fears of the often violent confiscation of farms.
It is going to be a tough job for them as the country has no currency of its own. The use of the Zimbabwean dollar as an official currency was abandoned in 2009 as the Reserve Bank legalized the use of foreign currencies for transactions.
“Zimbabwe is open for business. The country offers serious investment opportunities in mining, manufacturing, tourism, construction, agriculture and consumer-facing industries such as ICT. In addition, attractive fiscal incentives are available to registered and licensed investors,” says Mashakada.
The Zimbabwean constitution has been a thorn in the side hampering growth and foreign investment in the past. Mutambara says that one of the problems they have had over the past 10 years has been the issue of the constitution. He says that most agreed that the problems were coming from a flawed and dysfunctional constitution.
“For the past 10 or so years there has been a movement to develop a new constitution. What we have done with this referendum is that now we have a new constitution adopted by the people of Zimbabwe. It might not be the best or the most desired constitution; it was a compromised document. Three major parties had to compromise but it is better than the old constitution. The positive thing is to say that now Zimbabwe has a new constitution, which the majority of people endorsed, that’s progress… We need to make sure the taxation is supportive of investors. The referendum and constitution are a starting point in the journey of the creation of an attractive business climate,” says Mutambara.
When questioned about the past, which saw farmers and investors driven away, Mutambara is confident that it won’t happen again. He says that the indigenization law, which says foreign companies must sell 51% of their stake to a Zimbabwean national, is not about expropriation or nationalization.
“We want to empower our people, we want our people to be involved in their economy but when we say we want 51%, the Zimbabwean player must pay fair value for those shares. That way we have a partnership that brings stability for the investor and for the Zimbabwean economy,” says Mutambara.
Gabriel Shumba, a human rights lawyer and political commentator from Zimbabwe, is skeptical.
“It is still premature to be talking about investors returning to the country as much as talking about exiled Zimbabweans returning home. Zimbabwe still has to adhere to electoral regulations and we need to see the results of the elections not being contested before investors can come,” he says.
In the fight for investors, the Zimbabwean people have support from the South African government. South Africa’s deputy minister of trade and industry, Elizabeth Thabethe, told delegates at the conference that Zimbabwe could feed the entire African continent.
“We have agreed with our partners, including Zimbabwe, that we must do more collaborative work in developing institutions, including access to finance. In 2010, the country only managed to attract about $105 million out of over $2 billion proposals submitted. They are however showing interest in moving forward,” she says.
Gauteng Department of Economic Development MEC Nkosiphendule Kolisile agreed that South Africa should encourage investors.
“They must think employment, job creation. If your neighbors are having instability in their economy, you don’t go around rejoicing because that will have a direct impact on your economy,” he says.
The question is whether investors will heed the call. It is clear that if Zimbabwe sneezes, Africa catches a cold.

REFERENDUM AND INVESTMENTS

In the last decade, Zimbabwe’s economy has twisted slowly in the wind. It has broken records for all the wrong reasons: the highest inflation the world has ever seen and 80% unemployment.
After a disputed 2008 election, a creaky political agreement ushered in a power sharing government. In this brave new world the task of running treasury was given to a man, who calls himself a poor constitutional lawyer; an Arsenal fan, who thinks Arsene Wenger’s time is up.
Tendai Biti, 47, is a workaholic who without education would be a demon. They called him Bismarck at university—after the iron-fisted military founder of a united Germany—because of his uncompromising approach to debate. Bismarck is bitter about Wenger: “He has been torturing us with poor results. He must do the right thing”. The analogy is irresistible and perhaps Wenger would feel the same way in return.
<div id="attachment_1578" style="width: 210px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1578" class="size-medium wp-image-1578" src="/wp-content/uploads/2017/04/Tendai-Biti5-200x300.jpg" alt="" width="200" height="300" />Zimbabwe Minister of Finance and Economic Development Tendai Biti</div>
The main entrance to the seat of power has tinted windows and an intercom. It is possibly the only office at the new government complex offices, in the capital of Harare, with such an electronic device. The voice of the security guard asks politely: “How can I help you?” These security measures are not surprising—a group of war veterans once threatened to throw Biti from his sixth floor office.
Inside, his desk is full of paperwork. Biti wears a blunt face as he speaks to a mystified office aide who is handed back a file.
“He doesn’t want this and that signature. I don’t need to sign this paper. Where is he? He should be doing this and that. I don’t like that. This is nonsense,” says Biti.
Suddenly, I’m told: “Let’s do the interview now, I have no time.” No smile. No greeting. He starts swiping across his iPad and ignores several incoming phone calls.
Biti has been at the helm of the leaky financial ship that is Zimbabwe for years. He took the job in 2009, in the midst of the global financial crisis, with the aim of achieving a tough balancing act for a nation floundering in a dreadful recession. For a country with a power-sharing government and several power centers wanting money, especially state security, Biti is also in the midst of ugly politics. It is a job that needs guts, patience and the gonads of an elephant.
He stormed out of a cabinet meeting, which until then was unheard of in conservative Zimbabwe, stunning both President Robert Mugabe and prime minister Morgan Tsvangirai.
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I ask him how he manages his emotions, after telling him he can be very difficult.
“Yes, I do have mood swings but I’m a very vulnerable person. I hide in a shell of machoism. I’m very emotional, too emotional. I think and act with my heart. I know I can be a disaster. I get so angry and I speak my mind. What affects me are the tiny little things. People who are late; people who are sloppy; typographical errors kill me; bad English; bad grammar,” he says.
But why did he storm out of a cabinet meeting in July 2010?
“The discussions were going nowhere and I knew I was right so I just expressed my right of disassociation. I don’t like people who are dishonest. I also feel that I don’t owe you, so let’s be objective, let’s be impartial,” he says.
This year could make or break it for Zimbabwe. If the elections go ahead, with violence along the way, the country could go off the rails, taking investment hopes with it.
“Zimbabwe has been scuffled so much, suffocated so much by mediocrity, dictatorship and mendacity when other countries are moving. The election in 2013 must make a distinction. It’s a vote between the past and the future; it’s a vote between opportunity and the liquidation of opportunity,” he says, with a stern face.
Investors are apprehensive about elections. Like eagles, they are keeping an eye on the country from a distance. Biti has been wooing European investors but the odds are against him. His boss is a hard sell abroad. And what more can he expect, he doesn’t like him either but is managing him in a fragile coalition government in which the right hand, doesn’t know what the left hand is doing.
So far, the economy is fairly stable but the manufacturing sector is dead and investors are still watching, reluctant to walk through the open door.
Biti says they should get a bit of credit for cutting half a trillion percent inflation to 7% in a matter of months.
“What we did bordered on the miraculous… It has never been done; I don’t think it will ever be done again. You wear and tear, the arrows are thrown at you, pressure is like a tornado, it affects even your marriage and it’s phenomenal,” he says.
The Zimbabwe Accelerated Debt Arrears Clearance Debt and Development Strategy (ZAADDS) has been crafted to deal with the extensive debt. It is just as well as the country has a staggering $10 billion foreign debt, and will be negotiating its arrears with a visiting IMF team this quarter. Biti says they will try to negotiate out the arrears but the debt remains a structural issue dependent on elections.
“The country has two choices: the crocodile scenario and the cheetah scenario. I don’t want to be a crocodile… I want to be a cheetah. I want to sprint,” he says.
African Investment Markets’ Farai Dyirakumunda says Zimbabwe is on the radar.
“A lot of investors gave a wide array of investment opportunities with good upside potential. Some will sit on the fence during the election year due to uncertainties but there will be an eventual influx of foreign capital under the right conditions,” he says.
Hope pales in the face of reality.
The Confederation of Zimbabwe Industries (CZI) painted a desperate country teetering on the brink, late last year. Several banks have closed, the liquidity crunch is stalling domestic investment and the CZI has called it an economic emergency. Many people, who elbowed out of the formal sector, are selling goods by the roadside, with little or no manufacturing in the heavy industrial sites, which means that fewer taxes flow into the fiscus.
After paying January’s salaries, the government was left with just $217 in its coffers, just about enough for dinner at a posh restaurant. Luckily, $30 million flowed into the fiscus the following day; it highlighted the paucity of government coffers.
“It’s basically a cash economy,” says Biti.
Dyirakumunda says Biti is a practical minister.
“He has done reasonably in controlling government spending so that it is fully funded by tax revenue and government income. There have been funding constraints to what he could do to stimulate the economy through fiscal policy,” he says.
No wonder Biti has been tasked to beg for $200 million for the next referendum and elections.
In the retail sector, the painful reality is that most products in supermarkets are foreign-owned. The country suffers from a huge current account deficient. The imports amount to $7 billion, with exports a mere $3.5 billion, a gap the treasury wants to narrow. Zimbabwe is placed 132nd of 144 countries in the Global Competitiveness Report 2012-2013.
“There is still a lot to be done… and some of us we will look the beast in the eye and we will not blink,” he says.
Biti says his wife, Charity, is his rock. She couldn’t understand why someone had thrown a bomb at their house in order to, in her own words, “stress a point” but it was her unruffled demeanor, which helped Biti cope with the trauma.
Economist John Robertson, who has been studying Zimbabwe’s economy for nearly half a century, says that Biti’s opponents in government made promises about civil service salary increases, which they knew Biti could not keep.
“They pilloried him through the press for failing to keep the government’s promise. The intention was to force his resignation but all attempts failed,” says Robertson.
Biti describes his party boss, Tsvangirai, as the most open and humane person he has ever met. He wonders how after having emerged from one of the poorest villages in Zimbabwe, without a university education he has managed to achieve such great heights against the odds.
At home, he reads at lot about economics and philosophy. Perhaps it was this thirst for knowledge, which helped Biti become the youngest partner at a top Harare law firm Honey and Blackenberg at the age of 26.
“I can take the bull by the horns and I’m not afraid of work.”
He is inspired by biblical prophets and is fascinated by the books of Jeremiah, Judges and Solomon—“a fascinating collection of stories about cruelty, blood, murder, love and commitment,” he says. Biti also draws inspiration from American politicians, musicians, footballers and Nelson Mandela. He admires how, “You stay in prison for 27 years and walk out without bitterness”. And Thomas Jefferson amuses him.
“What did he mean by crafting in pursuit of happiness?” he asks with a chuckle.
As he warms up he reveals that he is in awe of how Barcelona’s Lionel Messi weaves his magic on the field. His love-hate relationship with Mugabe has defined his career but he doesn’t mince his words. Take a recent interview with state newspaper, Sunday Mail: “I’m still critical of him. I think if he had resigned many years ago a lot of the problems that are happening in this country would not be happening. I have a problem with people who are not democratic. How can someone sit in one position for 32 years? He belongs to a generation that is history, that is in the archives.”
After years of debate, the draft for the new Zimbabwean constitution was drafted on February 6. Both the ZANU-PF and Movement for Democratic Change put forward their interests. Tsvangirai tried to reduce the power of the presidential office, while Mugabe tried to include clauses that would help him maintain power. Once the draft is passed by Senate, Mugabe will set the date for the 2013 elections, which are tentatively scheduled for late June.
Biti said he has never been trusted by the ruling ZANU-PF because he emerged from a Movement for Democratic Change formation to run treasury.
“Some people don’t read; they are ignorant. They didn’t and some still don’t understand what we were trying to achieve. Some say education is important, I would like to submit that the cost of ignorance is incalculable.”
Zimbabwe can’t afford any more costs.
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<h4>Too Many Worries Spoil The Broth</h4>
Fine words of economic recovery may resound in government offices but they ring hollow in the battered and weary world of Zimbabwean business.
On the streets of Harare you could call supermarket chain Food World a monument to survival. For years, it suffered emptying shelves, job losses and a currency meltdown. The business kept breathing through a decade of economic disasters. Prices were pulled around by speculators and black marketeers. Then, government statutory price controls ate into its profit margins.
“We lost a lot of business in the era,” says Denford Mutashu, Food World manager.
“It’s certainly a period I don’t want to go back to, industry went to its lowest point, local supply dwindled later and we had to rely on imports. You didn’t have a strategy to implement, you could not plan.”
In 2013, Mutashu still feels his company is living on the edge. He fears the temporary stability brought by dollarization of the economy could go up in smoke if the elections turn violent.
His supermarket may be full but Mutashu feels that the finance minister isn’t helping much by imposing punitive duty on imports. Zimbabwe has bought around $7 billion worth of imports, while only exporting $3 billion worth.
“There is little production going on. We have to import 70% of the products you find here, cooking oil, flour and other products. That badly affects our profit margins… The disparity between exports and imports is worrisome; the country is facing serious challenges in terms of liquidity,” says Mutashu.
Food World imports the majority of its commodities from South Africa.
“There is quite a lot of inactivity and industrial capacity utilization has gone down. Other than looking at industry capacity, we then have to concentrate on industrial competitiveness,” he says.
Mutashu believes dollarization, which has seen dollars and rands used as legal tender, has been a salvation, saying that the worthless Zimbabwe dollar was killing business.
“The functional currency system has brought predictable prices, which rarely fluctuate, it has brought some sanity. We used to sell a loaf of bread for millions of dollars. But now there is restocking and prices have stabilized.”
On the other side of the coin, be it a dollar or a rand?
“Since we are using a currency, which we do not own and control, it is still a challenge for us to be able to control the economic pendulum. Whatever happens in South Africa also affects us because we don’t have control over the currency,” says Mutashu.
Zimbabwe used to export cooking oil, now it’s importing. As the recession heat took its toll, many companies went under. National Foods, one of the major cooking oil producers shut its plant. Household name Olivine weathered the storm but failed to cope.
At the very least the struggling supermarkets of Zimbabwe, such as Food World, are cooking but hope that the elections don’t spoil the broth.
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Bismarck Stares The Beast  In The Eye And Dares Not Blink

Nothing signifies the unbridled optimism in this East African nation more than the well-known Swahili phrase Kenya hakuna matata: there are no troubles in Kenya, which is bandied around in tourism circles; printed on T-shirts and repeated in blockbuster movies like Out of Africa and The Constant Gardener. But its economy has known more trouble than relief.
When inflation reached 100%, in 1993, President Daniel Moi printed money to fund his re-election campaign for the country’s first multi-party elections.
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Before President Mwai Kibaki was elected in late 2002, Kenya’s economy was in bad shape. Its growth averaged 1.1% for two consecutive years and shrank to minus 0.2% in 2000. Key sectors were stagnant; agriculture and tourism recorded marginal growth of 0.7% and 0.8% respectively.
To resuscitate the economy, government formulated the Economic Recovery for Wealth and Employment Creation Strategy in 2003, which hinged growth on the overhaul of infrastructure as well as political and economic reforms that would unshackle the economy. The most notable result was the investment of billions of dollars on infrastructure—from roads and railways to electricity. Since 2004 growth has averaged 5% and peaked at 7% in 2007.
Kenya’s economy is dominated by agriculture; the sector employs more than 70% of the population and accounts for 24% of the GDP. More than a third of Kenya’s agricultural produce is exported, which accounts for around 60% of the country’s exports. This, despite the fact that its arable land is a paltry 15%, the rest is either too dry or infertile
Irrigation systems could double this percentage. The country’s cash crops—tea, coffee and horticulture—have led to an increase in earnings due to high commodity prices.
Last year, the country exported 48% of its goods to African countries, mostly in the East African Community (EAC) trading bloc, which is not severely affected by the Eurozone debt crisis. During the last decade, however, Kenya’s imports have surpassed its exports. Despite a surge due to high global crop prices, earnings from its top four exports have been insufficient to pay for oil imports.
The services sector follows closely behind, with tourism leading the pack. Tourism earnings rose by 32.8% in 2011, bringing more than $1 billion to the country. Other sectors like wholesale and retail, transport, communications and education are following suit.
Kenya is a hub for the ICT sector with the largest fiber optic network in the region. M-Pesa—the mobile money transfer service operated by Vodafone’s subsidiary Safaricom—transfers $27 million a day and has more than 25 million mobile subscribers.
By the end of the year, the economy is expected to have grown between 3.5 and 4.5%, according to government projections; while World Bank estimates stand at  5%. Inflation, driven by high oil prices and inadequate rainfall which lead to high food prices, has fallen from 14% last year to around 5% this year.
The 2008 post-election violence saw more than 1,000 fatalities and led to a decline in economic growth from 7% in 2007 to 1.5% in 2008. Kenya’s new constitution, enacted in 2010, is expected to herald good governance and reforms. Yet the economy still faces structural challenges. According to the World Bank, its economy has become even more vulnerable as the country’s current account deficit could reach 15% of GDP this year. This is among the worst external balances in the world and poses a significant risk to Kenya’s economic stability. A sharp rise in oil prices could trigger severe inflation and economic downturn. Its debt levels of 45% are in decline from 65% at the turn of the century and are below the global benchmark of 60%.
Like many other African countries, Kenya  faces an energy shortage, which allows for investment from the private sector. The peak power demand, estimated at 1,191MW, is projected to grow at 7% annually over the next decade. To meet this  demand, the generating capacity will have to be raised from 1,534 MW to 2,263 MW by 2018.
State-owned Kenya Electricity Generating Company (KenGen) is set on providing geothermal power in the future. Investors are establishing wind farms in Northern Kenya as part of the Lake Turkana Wind Power Project. The government is looking to partner with the private sector to generate coal power, after deposits were discovered in the eastern region. Hydro and thermal power accounts for 80% of the country’s total generation, making its energy price susceptible to high oil prices and power rationing when rains fail.
On the social and political end, half of the population is younger than 35 and unemployment is at around 40% of the country’s 42 million. Experts says that job creation, especially among the youth, is necessary for long-term stability. Two of the leading candidates in the upcoming March elections—Uhuru Kenyatta and William Ruto—face crimes against humanity charges at the International Criminal Court at The Hague over their role in the 2008 post-election violence.
Vision 2030—which aims to make Kenya a medium income country by 2030—is hinged on economic growth of 10% per annum through governance reforms and a focus on infrastructure, energy and science. By that time, the population is expected to reach 60 million.
The recent discovery of commercially viable oil will welcome new investments and save the country on its huge monthly oil bill. Tullow, a London-based oil and gas company, discovered 143 meters of net pay oil deposits in northern Kenya. More than 23 companies have exploration licenses.
Mining—which contributes 1% to the economy and is confined to the extraction of soda ash—may receive a boost after Tiomin Resources, of Canada, was allowed to mine titanium deposits along Kenya’s southern coastline.
Infrastructure, needed to foster more trade, is also set to improve. The $23 billion Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPPSET) project is being touted as one of the biggest in Africa. It will entail the construction of a port, standard gauge railway, pipeline and highways connecting Kenya, South Sudan and Ethiopia. Throw in a resort city at Isiolo, in Northern Kenya, and they are betting it will be a winner.
As the World Bank aptly put it in 2010, if Kenya is an airplane, it’s flying on one engine. If the second is turned on, the  economy will ascend at supersonic speed, like a fighter jet.

‘Flying On One Engine’

Peaceful, organized and quiet on a Sunday afternoon. That was election day in the otherwise bustling and chaotic seaside capital of Luanda.
“I’m so proud of my country right now. Angola has shown it can organize itself, if it wants to,” says IT engineer Jose Tomas.
The August parliamentary elections were Angola’s second since the end of the civil war (1975-2002) and the third since independence. UNITA (The National Union for the Total Independence of Angola) almost doubled its 10% take from the 2008 elections, while new coalition CASA-CE won 6% of the votes. The MPLA is down 10% from its 82% landslide victory in 2008. Voter turnout at 60% was low. The African Union (AU) deemed the elections free, fair, just, transparent and credible. European observers were also positive.
“The margin of the MPLA victory, the AU observer mission’s judgment and the continued presence of Dos Santos as president spell continuity. The MPLA still has an absolute majority in Parliament. The increase in opposition MPs will have little impact on law-making and is unlikely to affect international business interests,” says Markus Weimer from independent think tank Chatham House
South African managing director of telecom company MCS Angola, Ryan Ellerker, thinks the peaceful elections and MPLA’s victory will have “a definite positive effect” on Angola’s business climate. He has already seen projects previously on hold being restarted.
“That shows confidence in the market, in the country and its political stability,” he says.
Managing director of insurance broker AIBA Rupert Weterings, who grew up in Zimbabwe, echoed Ellerker’s view.
“The positive political climate combined with the fact that Angola is one of Africa’s most resource-rich countries makes one realize that Angola is open for business.”
In the run-up to the elections, Angola’s largest opposition party UNITA held nationwide street protests twice against perceived fraud, lack of transparency, unequal funding and lack of media space. Other opposition parties have voiced similar grievances.
But Unita’s protests took the shape of cheerful campaign gatherings and a healthy wake-up rather than a threat to the status quo. Opposition parties may contest the election results within the framework of the law, but Weimer does not expect a different outcome.
The street protests of Angola’s budding revolutionary youth movement and disgruntled war veterans, which unlike the political opposition protests were forcefully repressed, dwindled as the elections drew near. Many of the veterans—who demanded long overdue social subsidies—were paid last-minute. The youths, who have suffered physical violence and threats, generally chose to voice their discontent in the larger and safer framework of opposition party’s manifestations.
In other words, time does not seem ripe for change.
According to Weimer, the government’s goal for the next five years will be to empower the Angolan private sector—particularly the small- to medium-sized businesses—agriculture and to increase formalization of informal businesses.
“After 10 years of national reconstruction, the top government priorities are now job creation and the reduction of poverty and inequality, which are crucial for medium to long-term stability,” he says.
The key to achieving these aims, according to Weimer, is the “colossal task” of diversifying the Angolan economy. “Colossal” because a staggering 97% of Angola’s exports are currently petroleum products, while the oil sector only employs around 1% of the population. In order to achieve all this, mass education is crucial, Weimer warns.
One essential factor must not be forgotten: President Dos Santos turned 70 three days before the elections and is widely expected to retire within the next few years. Vice-president Manuel Vicente, the former CEO of Sonangol, is equally widely expected to follow in his footsteps. But for that, Weimer said, “Vicente will have to develop his own support base and popularity.”
“The transition process may well take a few years still, but a smooth presidential succession is essential for continued stability.”
For now

Business As Usual  After Polling Day

Political risk continues to remain elevated in Zimbabwe. The introduction of a government of national unity (GNU) saw a decrease in violence and human rights abuses but little else. Differences between Zimbabwe African National Union (ZANU-PF) and the two factions of the Movement for Democratic Change (MDC) are glaring and threaten the future of the government.
A key source of political risk arises from the upcoming election. Southern African Development Community (SADC) member states have reaffirmed their position that no election can take place until all conditions of the 2008 Global Political Agreement (GPA) are fulfilled.
A key condition of the GPA is the formulation of a new constitution. A draft constitution has now been completed and submitted to the GNU for comment and suggestions for amendment. The two factions of MDC have supported the draft constitution and are ready to put it to a referendum.
President Robert Mugabe, who has ruled Zimbabwe for 32 years, is adamant there should be an election this year, but reality is that it may not be before 2013. It is likely the next election will be close. ZANU-PF will be reluctant to relinquish power to the MDC, which it accuses of being sponsored by the West. The voters themselves are eager for change following years of economic stagnation.
The European Union (EU) said it was considering easing decade-long sanctions if the country implements a new constitution; a move that could encourage a free and fair poll.
Politics will undoubtedly trump any economic policy considerations. As such, Zimbabwe is unlikely to see any significant economic reforms to revive the economy of what was once Africa’s bread basket. The indigenization drive will take center stage economically especially as the election draws closer. The indigenization legislation aims to ensure that 51% of foreign-owned companies are owned by indigenous, black Zimbabweans.
The indigenization program, which is in full swing is led by indigenization minister, Saviour Kasukuwere, who is seen as a die-hard ZANU-PF loyalist. One of the thorny issues for the program is the fate of the lucrative mining industry. The government is locked in a dispute with the country’s largest foreign investor, South Africa’s Impala Platinum (Implats). The miner has complied with the law by divesting the required share of the company to indigenous, black Zimbabweans. The government is to get 31% of Implats. The miner has requested that the government pay market prices for the stake. The cash-strapped government has refused to pay. The dispute still rumbles on.
From the resources sector the zealous Kasukuwere has turned his attention to the financial sector. The target is the four foreign-owned banks. Indicative of a rift within ZANU-PF, Zimbabwe Reserve Bank governor, Gideon Gono, has warned of the implications of indigenizing the banking sector, the backbone of any modern economy. The minister of finance, Tendai Biti, also added his voice of concern to such a move. ZANU-PF is likely to disregard these voices of reason and power ahead with the indigenization campaign until the elections. Indigenization is likely to be a vote winner for ZANU-PF. Therefore, investors will remain wary of the country’s investment climate.
Zimbabwe’s political environment will weigh heavily on an already injured economy. The minister of finance in July downwardly revised growth for 2012 from 9.4% to 5.6%. The revision is on the back of a poor harvest, inadequate donor funding and incoherent policies. Zimbabwe grew 9.3% in 2011.
Political uncertainty will surely remain in place until elections are held. Until then, the economic policy will remain incoherent, which will in turn be detrimental to the economy. Zimbabwe’s economy will only show signs of sustained recovery with a democratically elected government.

Tag: Elections

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Bismarck Stares The Beast In The Eye And Dares Not Blink

‘Flying On One Engine’

Business As Usual After Polling Day

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