Items filtered by date: Monday, 22 July 2019

South African President Cyril Ramaphosa on Sunday said he will seek an urgent judicial review of what he described as an irretrievably flawed report in which the country’s graft watchdog said he misled parliament over a campaign donation.

Public Protector Busisiwe Mkhwebane’s report followed an investigation by the watchdog into a 500,000 rand ($35,878.56) donation to Ramaphosa’s 2017 campaign for the leadership of the ruling African National Congress (ANC) from the CEO of services company Bosasa.

Ramaphosa said the report’s findings were not rational, based in fact or arrived at through a fair and impartial process - assertions Mkhwebane refutes - and that he would seek a judicial review of the report, its conclusions and the remedial action it recommended.

“After careful study, I have concluded that the report is fundamentally and irretrievably flawed,” Ramaphosa told a media briefing, adding that it was therefore appropriate the courts make a final and impartial judgment on the matter.

A statement issued on Mkhwebane’s behalf said she welcomes the president’s decision but stands by the report and will seek to assist the courts in arriving at the “correct conclusion”.

“She has no doubt that she exercised her powers and performed her functions without fear, favor or prejudice, as is required by the constitution,” the statement said.

Mkhwebane, who began the investigation after a complaint from South Africa’s opposition, on Friday said that she found the president had “deliberately misled” parliament and violated the executive ethics code in regards to the donation.

The saga has proven a headache for Ramaphosa, who has staked his reputation on cleaning up deep-rooted corruption and reviving Africa’s most developed economy, providing ammunition for enemies including an ANC faction loyal to his predecessor Jacob Zuma.

Ramaphosa initially told parliament that the money received by his son Andile was obtained for services he had provided, but he later corrected this by saying the payment was actually a donation towards his campaign.

The remedial actions Mkhwebane recommended included the speaker of the national assembly to demand publication, within 30 days of receiving the report, of all donations received by Ramaphosa.

She also instructed the chief prosecutor to investigate whether Ramaphosa’s campaign had laundered money in its handling of donations.

Ramaphosa’s supporters accuse her of acting as a proxy for Zuma’s faction, which she has denied.

 

(Reuters)

Published in Economy

Just before President George Manneh Weah inherited the mantle of authority from former President Ellen Johnson-Sirleaf, something sinister took place under the radar when no one was looking – or paying attention.

Authorities at the Ministry of Foreign Affairs, in the dying days of the Sirleaf era, finalized the extension of the restated biometric passport contract, committing Liberia to the Ghanaian printers, Buck Press Limited for a whopping USD 11.5m (eleven and a half million), on or before March 2021.

100 Percent Proceeds to Buck

The contract seen by FrontPageAfrica states that it can only be terminated when the following conditions are met:

“All 174,000 passports have been personalized; and Buck Press realizes USD 11.5m (eleven and a half million), Should Buck Press not achieve USD 11.5m the contract Period is extended for an additional term of twenty-four months until March 30, 2023 (the extended term) to allow for the personalization of additional ePassport application up to 60,000.” Buck Press shall receive one hundred percent (100%) of the proceeds from the Personalization of all additional 60,000 ePassport applications up to the unrealized portion of the contract value of USD 11.5M.

‘Cancellation Notice’

Now, FrontPageAfrica has gathered that in the wake of the recent shortage of passports at the Ministry of Foreign Affairs, the Weah administration has notified Buck Press of its intentions of cancelling the contract. The company’s representatives have reportedly been summoned to Monrovia for a meeting on July 29 during which notice of cancellation is expected to be finalized.

A copy of the “Notice of Cancellation” from the Ministry of Foreign Affairs to the printing press obtained by FrontPageAfrica outlined a number of contract breaches from the company which made the deal nearly impossible for Liberia to continue, signed April 7, 2017, it gave Buck Press Limited an immediate Notice of Cancellation of the Contract

Among the reasons given, the government through the Foreign Ministry said Buck had failed to establish Passport Application Centers in all Liberian Foreign Missions despite its agreement to do so at the signing of the extension in 2017.

The government was taken aback over the fact that Buck had put the government in a difficult situation of not being able to provide the means of fulfilling its commitment to provide consular services to its citizens residing outside the geographical territory of Liberia.

The government’s cancellation notice said Buck’s deliberate omission to meet these obligations under the contract, and the further instance by Buck Press by a confirmatory notice dated March 5, 2019 amounts to a material breach of the contract.

The cancellation notice added that Buck’s omission amounts to deliberate attempt to extend indefinitely the biometric passport supply contract to the detriment of the Government and people of Liberia, a fact that has been on-going since April 2004, a total of fifteen years to date.

The cancellation notice notified Buck Press that it had not kept either the International Bank(IB) nor the vaults at the Ministry, the established quantity of passport required for personalization as contracted. “The result being that Government has had to restrict and deny Ordinary Passport applications from deserving Liberian citizens.

 

 

Source: 

Published in Travel & Tourism
Britain’s chancellor of the Exchequer Philip Hammond said Sunday he would make a point of resigning before Boris Johnson became prime minister, saying he could never agree to his Brexit strategy.
 
Johnson is expected to take office on Wednesday, vowing to deliver Brexit on October 31 come what may, in the face of intense opposition in parliament.
 
Hammond, who holds the equivalent post of finance minister, has become an increasingly fierce critic of Johnson’s approach.
 
His resignation would show the depth of opposition Johnson may find himself up against as PM, observers said.
 
Former London mayor Johnson is the runaway favourite to win the governing Conservative Party’s leadership contest on Tuesday and then replace Prime Minister Theresa May when she quits the premiership on Wednesday.
 
Observers say Hammond would never have expected to remain as Chancellor of the Exchequer under Johnson anyway.
 
But the fact that the second most senior figure in the government is pre-empting his removal in any cabinet reshuffle by the incoming prime minister is seen as significant.
 
“I’m sure I’m not going to be sacked because I’m going to resign before we get to that point,” Hammond told BBC television.
 
“I understand that his conditions for serving in his government would include accepting a no-deal exit on the 31st of October.
 
“That is not something that I could ever sign up to.”
 
The postal ballot of 160,000 grassroots party members is expected to return Johnson, 55, as the new Conservative leader over his contender, Foreign Secretary Jeremy Hunt.
 
Any remaining ballots must be delivered by Monday at 5:00pm (1600 GMT). Bookmakers give Hunt around a one-in-15 chance of victory.
 
The centre-right Conservatives command a razor-thin majority in parliament’s lower House of Commons and Johnson’s opponents — both within and outside the party — are keen to scupper his leadership.
 
Johnson has vowed to take Britain out of the European Union on October 31, with or without a divorce deal.
 
Published in World

The controversy over the CFA Franc gets revived on a regular basis by African politicians and intellectuals. The currency gives rise to both passionate debate and simplistic, sweeping political declarations.

The CFA franc is one of two regional African currencies backed by the French treasury with pegging to the euro. It can refer to either the Central African CFA franc, or the West African CFA franc. They are separate currencies. But both are effectively interchangeable. In theory, the French government or the monetary unions using the currencies could decide to change the value of one or the other. So what’s all the fuss about? Cheikh Ahmed Bamba Diagne explains.


The basics of the CFA Franc

When French-speaking African states became independent, it was necessary to define the monetary relations between themselves, France and the rest of the world. With the exception of Guinea, then Mali, who chose to have an independent currency, other states’ monetary relations arose directly from the status quo, and the three currencies issued respectively in West Africa, East Africa and Madagascar remained in place.

They formed the basis for the exchange rate regime of independent states in the Franc zone.

However, the Franc zone is not only an exchange system, but also one of economic cooperation. Historically speaking, there were three hallmarks to the exchange system in African countries of the Franc zone:

  • First, the system of convertibility provided for complete freedom of exchange between the countries of the Franc zone, while their external exchange regulation remained identical;

  • Second, the exchange rate between France and the countries of the Franc zone was fixed. In other words, the exchange rate between the members of the zone and the rest of the world was defined through the exchange rate with the French Franc;

  • Last, in order to ensure convertibility and a fixed rate, the countries’ monetary reserves were pooled; the African countries kept theirs in Francs, and France guaranteed the value of African currencies in relation to the French Franc. This arrangement brought into effect an “operations account” opened by the French Treasury for three African and Madagascan issuing institutions, responsible for monetary policy, which stored their reserves in the account. In principle, three is no limit to the amount the operations account can be overdrawn. Today, its reserves equal 50% of their net foreign assets.

The net foreign assets held by West African Economic and Monetary Union countries in their operations account amount to 2,709bn CFA Francs (€4.1bn or $4.7bn). This amount is equivalent to a third of the profits of Total, France’s third largest company, or 0.18% of the French GDP.

The bitter lessons of Mali and Guinea

We must learn from others’ mistakes: over a 22-year period (1962-1984), Mali had a painful experience with its currency. Upon its exit from the CFA zone in 1962, the country conducted an expansionist monetary policy, leading to the devaluation of the Malian Franc in 1967, followed by a coup d’État the following year.

Guinea-Conakry, larger and richer in natural resources than Senegal, has had its own currency since 1960. The country is worth $7bn ($16bn for Senegal). What effect does the Guinean Franc have on the country’s development? The real question lies elsewhere.

Why should we, in the short to long term, resist a single currency for the Economic Community of West African States countries?

These eight countries – Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo – are worth a collective 58.966bn CFA Francs, that is, $102.2bn (the equivalent of 22% of Nigeria’s GDP). Côte d’Ivoire, which represents 35.2% of the economy of the zone, has never shared governance of the Central Bank. As a result, the zone’s monetary policy responds more to the needs of Cote d’Ivoire than to that of the member States.

What then would be the effect of the planned Economic Community of West African States currency, called the ECO, given that Nigeria alone represents 73.1% of the zone’s wealth, against just 26.9% for the other 14 countries? Clearly, there is a strong chance that satisfying the needs of Nigeria would be the chief preoccupation of monetary policy within the region.

What we can learn from the Euro zone

Some countries do not share the same interests as Nigeria. Rising oil prices may be beneficial to Nigeria, for instance, but they have a negative effect in non-oil producing countries. Given that these states clearly do not have the same interests, how can they share the same currency?

Before discussing a single currency for the region, other issues must be dealt with: intra-regional trade must be developed, clearing houses should be established, and the optimum currency area needs to be examined.

Useful lessons can be drawn from the difficulties of the Euro zone. The Greek crisis lowered the value of the European currency, making the German economy highly competitive. Since Germany is an exporting economy, the weaker the Euro, the better its economy fares.

In 2017, activist Kémi Séba, the president of the NGO Urgences Panafricanistes, burned a 5,000 CFA Franc note. His shock action sparked fresh discussions surrounding the currency.

In contrast to other countries in the Economic Community of West African States like Nigeria and Ghana, that have seen inflation of over 10%, monetary stability is a reality in the zone: inflation has been under control ever since the CFA Franc was devaluated in 1994. Such stability has enabled the zone to set up long-term economic policies, with scant difference between optimistic and pessimistic scenarios.

The most stable monetary zone in the world

Since 2011, West African Economic and Monetary Union member States have entered an even more positive trend of stable growth. Why, then, leave when stable economic growth of close to 7% can be maintained at a time when Africa is experiencing its lowest growth rate in 25 years (1.6%), and do so to join a zone that is chronically unstable due to the influence of Nigerian GDP, three quarters of which is dependent on oil? Since the Nigerian economy relies on this volatile natural resource alone, an Economic Community of West African States currency could be expected to be highly unstable.

Although currency can be used as an instrument for development, history shows that inflation targeting – a monetary policy where inflation objectives are set for a given period – remains the dominant monetary strategy, the number one priority. Only the American Federal Reserve has a dual mission: stabilising prices and stimulating economic growth.

Today, the West African Economic and Monetary Union is the most stable monetary zone in the world. What it needs, above all, is to establish a resource processing economy, and to improve the business environment, in order to create increased added value and lower unemployment.The Conversation

 

Cheikh Ahmed Bamba Diagne, Directeur scientifique du Laboratoire de recherche économique et monétaire (LAREM), Université Cheikh Anta Diop de Dakar

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Bank & Finance
Egypt on Sunday defended security at its airports after two European airlines temporarily halted their flights to Cairo.
 
The British Airways abruptly suspended all flights to Cairo on Saturday for seven days, citing unspecified security concerns.
 
German airline Lufthansa also said it had cancelled flights to the Egyptian capital while an evaluation of the situation was taking place, but said later that normal flights would resume on Sunday.
 
The move raised concerns in Egypt over potential harm to the country’s vital tourism industry, which was recently showing signs of recovery after a years-long slump.
 
A senior Egyptian aviation official criticised the flight cancellations.
 
“All Egyptian airports are well-secured. Security at them exceeds the standard rules,” head of Egypt’s Civil Aviation Authority, Sameh al-Hefnawi, said late Saturday.
 
He claimed that the cancellations were politically motivated.
 
“The issue has nothing to do with aviation. It is political. “Whenever Egypt is recovering, a fabricated crisis happens,” al-Hefnawi added.
 
In response to British Airways’ cancellations, the Egyptian Ministry of Civil Aviation said it had increased the seat capacity of the national carrier EgyptAir’s flights to London.
 
The ministry added that it would operate an additional flight to London starting on Sunday during the suspension period.
 
In its updated travel warning for Egypt, the British Foreign Office referred to British Airways’ decision and points to an increased terrorism risk for air traffic.
 
The office warned against non-essential travel to Sharm el-Sheikh, wherein 2015 a bomb exploded on a Russian passenger jet shortly after take-off, killing all 224 people on board.
 
The bombing, which was claimed by the Islamic State terrorist organisation, prompted multiple countries to cancel flights to the Red Sea resort town.
 
Published in Travel & Tourism

The Nigerian National Petroleum Corporation (NNPC) said it recorded a trade surplus of N6.33 billion for the month of May, 13 per cent higher than the N5.60 billion surplus made in April .

The corporation disclosed this in its Monthly and Operations report (MFOR) released on Sunday in Abuja.

It attributed the rise to the increase in gas and power output and surplus recorded by the corporation’s downstream entities like NNPC Retail, Petroleum Products Marketing Company(PPMC), Nigerian Pipelines Security Company(NPSC) and Duke Oil.

The report further indicated that within the period, the NNPC recorded a total of 580.32 million dollars in export sale of crude oil and gas which is 23.39 per cent higher than the previous month’s figure.

”Out of this number, crude oil export sales contributed 458.59 million dollars which translates to 79.02 per cent of the entire dollar transactions compared with 342.11 million dollars contributed in the month of May,” it said.

It also showed that between May 2018 and May 2019, crude oil and gas worth 5.97 billion dollars was exported.

On the downstream, the report noted that for the corporation to ensure uninterrupted supply and effective distribution of petrol across the country, a total of 2.06 billion litres of petrol translating to 66.49mn liters/day were supplied for the month of May.

It noted that beyond supply, the corporation continued to monitor the daily stock of petrol to achieve smooth distribution of petroleum products and zero fuel queue across the nation.

“Within the period, a total of 60 pipeline points were vandalized which represents 52 per cent decrease from the 125 points vandalized in April.

“The Atlas Cove-Mosimi and Ibadan-Ilorin pipelines accounted for 38 per cent and 23 per cent respectively and other locations accounted for the remaining 39 percent of the total breaks,” the report said.

The report attributed the improvement to the spirited efforts by NNPC in collaboration with the local communities and other stakeholders to continuously strive to reduce and eventually eliminate this menace.

The May 2019 NNPC MFOR is the 46th in the series, designed to provide greater transparency and remove the perception of opacity associated with the operations of the national oil company.

Published in Business
Stanbic IBTC Bank Plc has failed in its attempt to have the Supreme Court of Nigeria,  Abuja set aside the N2.5 billion judgment delivered against the bank.
 
The five-man panel of  Justices of the Supreme Court, Musa Dattijo Muhammad, John Inyang Okoro, Amiru Sanusi, Paul Adamu Galinje and Uwani Musa Abba Aji, in their ruling unanimously agreed that the bank’s application to set aside the judgment of the court lacked merit, consequently,  a cost of N500, 000 was awarded against the bank.
 
The bank’s lawyers, Mr. O. Ayanlaja, SAN, and Mr. Tayo Oyetibo, SAN, had  approached the apex court, urging it to set aside the judgement of the court in respect of appeal filed before the court  by Stanbic IBTC Bank PLC against Longterm Global Capital Ltd. and Mr. Patrick Akinkuotu, which was dismissed, to be set aside on the basis that it could be set down for rehearing on its merits.
 
The bank’s application was based on ground that the court reached its decision without a consideration of its brief of argument at the lower court and on ground that the brief was not the exact replica of what was  ordered by the lower court.
 
The five-man panel of the Supreme Court judges unanimously agreed that although there were instances where the apex Court could reverse itself, it iwas not in the instance case.
 
In the lead judgment delivered by Justice Uwani Musa Abba Ali in dismissing the application, he said: “I cannot but fully agree with the submission of the learned counsel to the respondents that this application is frivolous, baseless, scandalous and contemptuous to be dismissed.
 
“There is a synergy of concurrence in reasoning and decisions from the trial court upward that this case was decided on its merits and smacks of any oversight or miscarriage of justice, thus cannot be reviewed and therefore does not fall within the genre and the circumstances of judgments to be set aside.
 
“There is no point saying that none of the conditions that would justify the setting aside by this court of its judgment earlier delivered on March 15, 2019. The finality of this court’s decision cannot and should never be compromised. The moment this court sets undeserved or unwarranted precedent by indiscriminately setting aside its own decision in the absence of special and compelling reason to do so, will certainly amount to setting dangerous precedent which will surely open flood gate for parties to undeservedly file similar applications and will thereby continue to bring no end to litigation. This application should outrightly be refused and dismissed unhesitatingly.”
 
Published in Bank & Finance

Tanzania’s economy expanded 5.2% in 2018, the World Bank said, the second major report this year from a multilateral financial institution contradicting rosier government figures.

Tanzania’s finance minister had told parliament last month that growth was 7% last year

In a report, the World Bank, which makes its calculations based on state data, also forecast 2019 growth at 5.4% – again lower than the government’s estimate of 7.1%.

Last year’s growth was affected by a decline in investment, exports and private lending, the report said.

“Data related to consumption, investment and net trade suggest that growth softened in 2018,” it said.

President John Magufuli embarked on an ambitious programme of industrialisation after coming to power in 2015, investing billions of dollars into infrastructure, including a new rail line, reviving the national carrier and a hydropower plant.

But government interventions in mining and agriculture have led to declining investment in east Africa’s third largest economy. Foreign direct investment has more than halved since 2013, while private sector lending growth plummeted to less than 4% in 2018, far below the 20% average between 2013-16.

The World Bank report follows an unpublished International Monetary Fund (IMF) report in April that also raised questions over Magufuli’s handling of the economy.

A leaked version of the report, seen by Reuters, accused the government of undermining the economy with “unpredictable and interventionist” policies, saying medium-term growth would be around 4-5 percent, again below official forecasts.

In its report, the World Bank said investment growth was subdued partly because of government struggles to meet spending targets in development projects. The economy could grow to 6% by 2021 “with a modest improvement of the business climate and a pick-up in [foreign direct investment] and other private investment,” the bank said.

Other economic indicators also point to a slowing economy.

The current account deficit widened to 5.2% percent of GDP in the year ending January 2019, up from 3.2% a year earlier, the bank said. The value of exports dropped nearly 4% last year, partly because the government banned cashew exports, a major foreign exchange earner, due to low prices.

On the other hand, the construction of the standard gauge railway and expansion of Dar es Salaam port helped drive up the value of imports by 7.8%, the World Bank said. The government should minimise economic risk by improving the business environment and fiscal management, it recommended.

Globally, Tanzania is also vulnerable to weaker demand, tighter financing conditions, and higher international energy prices, it said.

 

Reuters

Published in Economy

African leaders launched a continental free-trade zone that if successful would unite 1.3 billion people, create a $3.4 trillion economic bloc and usher in a new era of development.

After four years of talks, an agreement to form a 55-nation trade bloc was reached in March, paving the way for African Union summit in Niger where Ghana was announced as the host of the trade zone’s future headquarters and discussions were held on how exactly the bloc will operate.

It is hoped that the African Continental Free Trade Area (AfCFTA) - the largest since the creation of the World Trade Organization in 1994 - will help unlock Africa’s long-stymied economic potential by boosting intra-regional trade, strengthening supply chains and spreading expertise.

“The eyes of the world are turned towards Africa,” Egyptian President and African Union Chairman Abdel Fattah al-Sisi said at the summit’s opening ceremony.

“The success of the AfCFTA will be the real test to achieve the economic growth that will turn our people’s dream of welfare and quality of life into a reality,” he said.

Africa has much catching up to do: its intra-regional trade accounted for just 17% of exports in 2017 versus 59% in Asia and 69% in Europe, and Africa has missed out on the economic booms that other trade blocs have experienced in recent decades.

Economists say significant challenges remain, including poor road and rail links, large areas of unrest, excessive border bureaucracy and petty corruption that have held back growth and integration.

Members have committed to eliminate tariffs on most goods, which will increase trade in the region by 15-25% in the medium term, but this would more than double if these other issues were dealt with, according to International Monetary Fund (IMF) estimates.

The IMF in a May report described the free-trade zone as a potential “economic game changer” of the kind that has boosted growth in Europe and North America, but it added a note of caution.

“Reducing tariffs alone is not sufficient,” it said.

Divergent interests

Africa already has an alphabet soup of competing and overlapping trade zones - ECOWAS in the west, EAC in the east, SADC in the south and COMESA in the east and south.

But only the EAC, driven mainly by Kenya, has made significant progress toward a common market in goods and services.

These regional economic communities (REC) will continue to trade among themselves as they do now. The role of AfCFTA is to liberalize trade among those member states that are not currently in the same REC, said Trudi Hartzenberg, director at Tralac, a South Africa-based trade law organization.

The zone’s potential clout received a boost on Tuesday when Nigeria, the largest economy in Africa, agreed to sign the agreement at the summit. Benin has also since agreed to join. Fifty-four of the continent’s 55 states have now signed up, but only about half of these have ratified.

One obstacle in negotiations will be the countries’ conflicting motives.

For undiversified but relatively developed economies like Nigeria, which relies heavily on oil exports, the benefits of membership will likely be smaller than others, said John Ashbourne, senior emerging markets economist at Capital Economics.

Nigerian officials have expressed concern that the country could be flooded with low-priced goods, confounding efforts to encourage moribund local manufacturing and expand farming.

In contrast, South Africa’s manufacturers, which are among the most developed in Africa, could quickly expand outside their usual export markets and into West and North Africa, giving them an advantage over manufacturers from other countries, Ashbourne said.

The presidents of both countries attended the summit.

The vast difference in countries’ economic heft is another complicating factor in negotiations. Nigeria, Egypt and South Africa account for over 50% of Africa’s cumulative GDP, while its six sovereign island nations represent about 1%.

“It will be important to address those disparities to ensure that special and differential treatments for the least developed countries are adopted and successfully implemented,” said Landry Signe, a fellow at the Brookings Institution’s Africa Growth Initiative.

The summit also saw the launch of a digital payments system for the zone and instruments that will govern rules of origin and tariff concessions, as well as monitor and seek to eliminate non-tariff obstacles to trade, the African Union said.

 

Source: Reuters

Published in Opinion & Analysis
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