Burkina Faso presidential guard should be disbanded, panel says

Comments (0) Africa, Elections, Latest Updates from Reuters, Politics

OUAGADOUGOU (Reuters) – Burkina Faso’s powerful presidential guard should be dismantled, according to a commission charged with proposing reforms after a popular uprising toppled the West African nation’s longtime president.

The elite unit, known locally as the RSP, was a key pillar of President Blaise Compaore’s regime before mass demonstrations forced him to flee the country last October, ending 27 years of rule.

Its interference in the interim administration that followed Compaore’s ouster, including attempts to force the prime minister’s resignation of over his plans to reduce its size and pay, provoked further protests and prompted the authorities to call for a review of the RSP’s role.

In a report submitted to Prime Minister Yacouba Isaac Zida, himself a former commander in the RSP, the national reconciliation and reform commission on Monday described the 1,200 troop strong unit as “an army within an army”.

It called for the regiment to be broken up and its members redeployed within the framework of a broader reform of the military.

The commission said responsibility for ensuring the security of Burkina Faso’s president and state institutions should be conferred upon special units of the police and gendarmes.

A decision on the RSP’s future will most likely wait until after Oct. 11 elections when voters will choose a new president and parliament to restore democratic rule.

Burkina Faso’s army did not intervene to save Compaore when tens of thousands of demonstrators took to the streets to protest against the president’s attempts to push through constitutional changes to extend his rule.

However, the RSP has been accused by rights groups, including Amnesty International, of shooting and killing protesters during the uprising.

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Botswana sees budget deficit narrowing in 2016

Comments (0) Africa, Business, Latest Updates from Reuters, Politics

GABORONE (Reuters) – Botswana’s budget deficit will narrow to 0.03 percent of gross domestic product from a previous forecast of a 2.6 percent shortfall, the ministry of finance said on Thursday.

The department attributed this to expected growth in revenue collected from non-mineral taxes, which it said would likely grow 10.4 percent to 10.32 billion pula ($977 million).

“This significant growth rate of the non-mineral revenue is encouraging since it reflects possible success of our diversification efforts,” the department said in budget strategy paper.

Botswana halved its 2015 growth forecast in August to 2.6 percent from 4.9 percent previously, citing expected weakness in the diamond market which accounts for nearly 40 percent of its budgetary revenue and around 85 percent of exports in dollar terms.

Sluggish sentiment in the market has seen both De Beers and Botswana’s Okavango Diamond Company (ODC) sales falling by over 20 percent in the first six months of the year.

The ministry added that it projected total revenues and grants rising 3.1 percent in the 2016/17 financial year from previous estimates.

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IMF will not see new Zimbabwe loans in at least three years

Comments (0) Africa, Business, Latest Updates from Reuters, Politics

HARARE (Reuters) – The International Monetary Fund said on Thursday it would be at least three years before Zimbabwe can start accessing loans from international lenders and needs to deepen economic reforms in the medium term to strengthen its ability to repay debt.

Domenico Fanizza, head of a visiting IMF mission said there were no quick and easy fixes to Zimbabwe’s recovery, adding that what was needed in Zimbabwe were costly reforms that would take time to be felt by ordinary citizens.

The once promising southern African nation owes foreign creditors $9 billion and has been struggling for five years to recover from a catastrophic recession that send hyperinflation into billions amid widespread food shortages.


(Reporting by MacDonald Dzirutwe; Editing by James Macharia, Reuters)

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Post-Sanctions Iran: A Modern Day “Gold Rush” for Investors

Comments (0) Latest Updates from Reuters, Middle East, Politics

Iranian flag

By Enu Afolayan (Contributor)

Iran is opening up all major sectors of its economy for foreign investments. The conditions are still under discussion, butforeign businesses are already preparing their market penetration plans. Iran offers exciting opportunities, however the risks are even higher.

On the 29th of June, the Foreign Minister of France met Bijan Namdar Zanganeh, the Oil Minister of Iran, to announce the beginning of a new era in the history of Iran’s oil industry. France’s Total corporation would be the first foreign company to develop Iran’s oilfields after the sanctions have been lifted.

It is expected that the additional oil from Iran will lead to a market supply increase, and consequently to a further decrease in oil prices. It is still a big question whether this scenario will become a reality. While experts and the media try to forecast the amount of barrels arriving on the market from Iran, there may be other aspects of this “Iranian thaw” that could be even more important than short-term fluctuations of BRENT and WTI oil prices.

Iran is opening up all major sectors of its economy for foreign investments. The conditions are still under discussion, but foreign businesses are already preparing their market penetration plans. Iran offers exciting opportunities, however the risks are even higher.

Economics of the Iranian Thaw

The result of the negotiations between Iran and the G6 countries (Russia, USA, EU, Great Britain, France, China and Germany) in July was the so-called Joint Comprehensive Plan of Action – the agreement on Iran’s nuclear program. In exchange for relief from some sanctions, Iran agreed to significantly reduce the stockpile of enriched uranium in the country, and to provide access to IAEA experts to all nuclear facilities in Iran for the next 20 years. Iran also agreed to suspend uranium enrichment operations for 15 years. The EU and the US agreed to lift sanctions starting next year as long as Iran complies with agreements made.

The decrease in oil prices shocked the Iranian economy that had already been struggling. Sanctions have been a heavy burden for the country, weakened by excess bureaucracy, corruption and mismanagement.

The sanctions imposed on Iran led to 60% decrease in oil exports – from 2.5 million barrels per day to 1.4 million barrels per day, with dire consequences for the country’s economy. In 2013, while oil prices were at their peak, Iran’s oil revenues fell from 100 billion USD to 35 billion USD, and GDP was down 5%.

The decrease in oil prices pushed the Iranian government into a corner and it had to recognise the urgent need of reforms. By agreeing with Western countries, Iran aimed to solve multiple problems: the lifting of sanctions, increasing the effectiveness of the economy by attracting foreign investments, and offsetting the oil revenue decrease through increased production output.


Oil Investments as a Key Goal of the New Governmental Policy

Throughout the history of Iran, oil played a significant role, not only for the economy, but also for the country’s national identity. The first nationalisation of the oil industry under Mohammed Reza Pahlevi happened under the idea of “liberation” of the country from English corporations that exploited the country’s oil resources. Mohammad Mossadegh, the prime minister of Iran in 1950’s, was the first politician to “give back the oil to the people of Iran”. In 1951, the property of Anglo-Persian Oil company (later known as BP) became national property of the country.

In 1953, as a result of a military coup, Mossadegh was ousted and nationalisation was cancelled. British and American corporations agreed on the privatisation of the National Iranian Oil Company. Even though only 10% of the company’s shares belonged to foreign corporations, Ruhollah Chomeini had gained many Iranian hearts by making the “battle for the oil” key to the main leitmotif of his political campaign in exile.

After the 1979 revolution, foreign companies were forced from Iran. The oil industry went into a long period of decline, which lasted until the end of 1990’s, when liberal president Mohammed Hatami attempted to revive the oil industry by cooperating with foreign partners. Unfortunately, his efforts were curbed by the nuclear program of Iran that deteriorated the country‘s relations with the West.

Today, the Iranian government is desperately trying to attract foreign investments into the oil sector in order to increase production output and to fill in the hole in oil revenue. Recently, the Oil Minister of Iran said that without sanctions the country would be able to increase output to 4 million barrel per day. However, Iran would need investments of 50 billion to 100 billion USD to achieve this ambitious goal. To attract this amount of money from foreign investors, the government of Iran has to ensure smooth transformation of all necessary institutions, and to restore the trust of the international community. After two decades of state oil monopoly and two nationalisations, it may take years.

The positive aspect is that after relief from the sanctions, Iran can bring about 30-40 million barrels of crude and condensates that it held in floating storage. Based on estimates of the International Energy Agency, it would ensure the supply of an additional 180,000 barrels per day for 6 months to the global market. Knowing that global consumption of oil is currently at about 90 million barrels per day, this additional oil supply is unlikely to influence oil prices.


Iranian Foreign Minister Mohammad Javad Zarif shakes hands on January 14, 2015 with US State Secretary John Kerry in Geneva. AFP PHOTO / POOL / RICK WILKING

Non-oil Investments as a Side Effect

It isn’t only the oil and gas industry players that are enthusiastically welcoming the opening up of the Iranian market. The World Bank predicted a “massive economic windfall”, advising Iran to attract investments into non-oil industry, including infrastructure and communications. However, the success of the new investment policy depends on proper planning on the part of Iran. At the moment, the outlook is not as shiny as it might have appeared: widespread corruption and the need of transformation of many national institutions will probably hamper the government’s efforts and discourage investors.

Despite many organisational challenges, Iran attracts investors with tremendous opportunities. A modern day “Gold Rush” is expected to set off in Iran. Coca Cola, Mercedes, Arabian hospitality corporations, American grain importers, European power corporations and many others are already looking forward to the battle for their share of the Iranian market.

The internal privatisation began in Iran few years ago. For a decade, Iranian investors have been acquiring undervalued assets: insurance companies, hospitals, and other public utilities were put up for sale. Recently, the state telecommunications company was put up for sale. However, due to the deep crisis in Iran’s economy, it is getting harder and harder to find internal buyers for these assets. Foreign investments could be an easy solution for Iran’s desperate need for money.

At the same time, Iran’s government is still not clear on conditions of cooperation with foreign investors. President Rohani stated recently that foreign investors would be welcome only if they worked with a local partner, hired local workforce and transferred their technology to Iran.

While the new foreign investment law is still a work in progress, the Iranian president continues his meetings with investors, encouraging them to take the opportunities offered by the new post-sanctions Iran.

Failure of Industrial Nationalism

Media attention is now focused on the relief from sanctions in Iran. However, the key problem in Iran’s economy is not the sanctions that were imposed just a few years ago. The problems with Iran’s economy began much earlier, and they were linked to the nationalisation of all sectors and economic isolation after the revolution.

Iran has the largest hydrocarbon reserves in the world, but its production capacity is lower than that of Russia, USA, Saudi Arabia and Canada. This proves that Iran failed to use the potential of its oil industry to give an impulse to economic development. It had good chances to become a country with one of the highest GDPs per capita and to develop a smart investment policy to boost other sectors of economy. But unfortunately, the success of economic development depends not only on the amount of oil reserves, but also on institutional capacity, anti-corruption measures and proper management systems. Unfortunately, in all these areas, Iran has been at the bottom of global rankings. With or without sanctions, the government of Iran should find a solution to the country‘s internal structural problems.

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Room to Breathe: Balancing Climate Change with Development

Comments (0) Africa, Environment, Latest Updates from Reuters, Politics

seyni nafo

By Sheldon Mayer, Managing Editor

In preparation for the 21st United Nations Climate Change Conference (COP21) to be held in Paris in early December, the African Group representative, Seyni Nafo, is readying the hard line he will take with the need to balance Africa’s development and to reduce the horrific impacts of climate change upon the continent.

Mr. Nafo, of Mali, will be representing the 54-country continent in UN negotiations in the UN Framework on Convention on Climate Change (UNFCCC), a multilateral treaty signed  in 1992. The 34-year-old Nafo has said that “it’s a positive agenda. It will bring concrete initiatives, not just statements but ambitious initiatives,” an issue that is always of concern in UN treaties due the unenforceable nature of most documents.

Seyni Nafo: There and Back Again

A position of influence is not new to Nafo, the son of an international banker who held lofty positions, including with the African Development Bank. Even with four siblings including a twin, Nafo’s voice was always heard. As Nafo and his family dutifully followed his father, Nafo rubbed shoulders with the elite, particularly during his time at Lycée Saint-Martin-de-France in Pontoise. Run by the Congregation of the Oratory, Nafo said that the Lycée Saint Martin was “not necessarily a school of excellence, but a school of bourgeois or aristocrats,” which built his character and formed the foundation for the strong leader he is today.

Representing nearly 1 billion people in Africa’s struggle to maintain development in the face of carbon emission reductions takes a certain kind of leader: according to Alix Mazounie of the Climate Action Network, Nafo has the necessary “x-factor.” “[Nafo] has a real ability to negotiate with developed countries, and encourage them to do more for Africa…he prefers realistic commitments rather than aberrant figures,” both of which are integral qualities when dealing with the at times glacial UN body.

Before he arrived at the peak of African climate negotiations, Nafo spent a great deal of time abroad. After completing his studies, he worked as a trader in Chicago and learned the ropes of high-powered finance in the world’s carbon emission leader. After returning to Mali 27 years ago, Nafo’s view on climate change sharply focused—“we have no choice,” he said, but to turn to renewables.

A Breath of Fresh Air

While he continues to work as a trader in the African market, he is acutely conscious of the vast differences in his current (albeit officially unknown) income and his potential income were he a hedge fund manager in the United States. The fact that he knows the opportunities available to him and yet remains in his current position as Africa’s climate change forerunner shows his true character. By using his knowledge of international markets, he has embraced the challenges of representing a continent that has relatively little sway in terms of negotiating climate deals but that bears the brunt of the negative effects of climate change.

Nafo’s comments are usually population-centric, and mean to bring attention to Africa’s particularly difficult position. During a 2012 conference, Nafo issued a firm response to US climate envoy Todd Stern, saying that “Africa is at the forefront of climate impacts; science shows that temperatures [have risen] approximately 150% more than the global average…that means the destruction of crops on a huge scale…crops [that] belong to subsistence farmers and the result is devastation and famine. This is not a game with numbers; it’s a question of people’s lives.” 

Keeping Development Alive In Hostile Climate

Nafo knows that sacrificing development in order to reduceAfrica’s relatively low emissions would have would have catastrophic implications. He is a strong proponent of clean energy because it provides an opportunity to maintain development while lowering emissions. “Not only Africa is the region that has the least amount of greenhouse gas emissions and which is the most vulnerable,” says Nafo, “but it is also the region with the greatest potential for renewable energy and the one with the lowest rate of current energy access.” For Nafo, clean energy is the safest, fastest and surest way to develop the continent. While his commitment to clean energy is not purely a commitment to bluer waters and cleaner skies, it shows a deep understanding of Africa’s bargaining power.

A Fair Shot

For Africa, reducing the impacts of climate change is anything but a game. The summit provides an ideal platform to push their development plans as climate-friendly: Africa has borne the brunt of climate change’s negative impacts despite contributing only 3% of the world’s carbon emissions, according to Nafo. The African continent has been crippled by drought and famine, plagued by seemingly endless civil war, and is now at the mercy of the world’s largest emission offenders.

Africa has not had the same pattern of development as the majority of the world: crippled by Western imperialism and colonialism, as well as today’s mismanagement of assets, internal struggles and external pressures, Africa needs a chance to develop before its industry can be curtailed. A continent with nearly 1/7th of the world’s population and only 3% of its global emissions should not be held responsible for change. It is irresponsible of global leaders to suggest that Africa limit itself in the same way as China or the United States. A realistic (meaning enforceable) plan should be developed that promotes sustainable energy sources without decimating Africa’s burgeoning industrial sector.

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South Africa’s Zuma says urgent intervention needed to save mining sector

Comments (0) Africa, Business, Latest Updates from Reuters, Politics

PRETORIA (Reuters) – Consistently low commodity prices and the risk of job losses have forced the government to call an urgent meeting with labour and business leaders in South Africa’s mining sector, President Jacob Zuma said on Tuesday.

The mining industry, which contributes around 7 percent to Africa’s most developed economy, is struggling with sinking commodity prices, rising costs and labour unrest, forcing a number of companies into mine closures and layoffs.

“We meet under difficult conditions. The global economy is experiencing a downturn which is posing a challenge for South Africa’s economy, which is a net exporter of key mineral commodities,” Zuma said in opening remarks at the Mining Sector National Consultative Forum in the capital Pretoria.

The meeting comes after a 10-point plan was signed by the mines ministry, labour and industry to stem a wave of job cuts triggered by falling prices and rising costs.

Zuma’s ruling ANC party is facing increasing pressure from the left-leaning parties who accuse him of neglecting the working class ahead of local elections next year.

Mines Minister Ngoako Ramatlhodi told reporters he wanted to save mines while also conserving jobs and that the meeting with Zuma would hopefully yield solutions to the job losses.

“It is crucial, it is important and we have elevated it to the president’s level and that tells you the importance we have attached to this gathering,” he said.

Ramatlhodi has previously said almost 12,000 mining jobs were on the line in South Africa, which has an unemployment rate of around 25 percent and glaring income disparities.

South Africa sits on close to 80 percent of the world’s known reserves of platinum, a metal used in emissions-capping catalytic converters which is facing depressed demand.


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Nigeria’s New President Inherits a Country Without its Black Gold

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Paralyzed by gasoline shortages, Nigerian authorities appear close to reaching a solution. The crisis began in early March, weeks before the 29 March election that elected Muhammadu Buhari as Goodluck Jonathan’s replacement. Nigeria has long paid oil importers subsidies to control price and guarantee a steady supply. That, however, no longer seems to be working.

Oil suppliers’ credit lines were tightened amid the falling global price of oil, a slump in Nigeria’s currency, the naira, and the unpaid debt by the former President’s government. Suppliers claim that more than 900 million euros are owed in back-payments of government subsidies.


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Nigeria’s new president vows to fight endemic corruption

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muhammadu buhari

Along with security and unemployment, Nigeria’s new president Muhammadu Buhari, has declared corruption as one of the top three challenges he plans to tackle during his term.

The 72-year-old former military ruler took office on 29 May after defeating incumbent Goodluck Jonathan in the race to run a country struggling with a waning economy, endemic corruption, rampant unemployment, and the on-going security threat from Boko Haram.


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Al-Shabab uses dirty energy to get dirty money

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Al-Shabaab fighters

In 2012, the United Nations banned wood charcoal imports from Somalia. Almost no-one took notice of the United Nations’ stand against terrorism in the horn of Africa: al-Shabab, the militant organization responsible for the horrifying attack on Garissa University in Kenya this April among other atrocities, funds the majority of its activities through the sale of wood charcoal.

Al-Shabab receives an estimated $50 million per year from charcoal exported through Somalia’s major ports.


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Why Morocco intervened in Yemen?

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In light of the downing of a Moroccan F-16 jet in Yemen, the question “Why is Morocco intervening in the Yemen crisis?” must be asked. The Foreign Ministry has abandoned its legendary discretion and The Royal Air Force – along with a Saudi Arabia led coalition- is engaging in Yemen against Houthi Shiite rebels. Why does Morocco have an interest in this? Here are some explanations.

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