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Central African growth hit by low oil price, security threats: IMF

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

YAOUNDE (Reuters) – Tighter public spending, economic diversification and greater regional trade are needed to spur growth in central Africa that has been hampered by plunging oil prices and security threats, the head of the International Monetary Fund said on Friday.

Speaking in Cameroon during a regional tour, IMF managing director Christine Lagarde said growth in the resource-rich CEMAC bloc – comprising Cameroon, Central African Republic, Chad, Congo-Brazzaville, Equatorial Guinea and Gabon – slowed in 2015 to around 2 percent and will increase only slightly this year.

“The prolonged slump in oil prices presents a new reality for CEMAC,” Lagarde said. “An adjustment in large scale investment plans may be necessary in the short run, to preserve fiscal viability and debt sustainability in the medium term.”

Oil has dropped from over $100 a barrel in June 2014 due to global oversupply, to around $30 a barrel this week, which provides a challenge for countries in Central Africa whose economies rely largely on exports of oil.

Some have been hit harder than others. Equatorial Guinea experienced a “severe” contraction, Lagarde said, while Cameroon saw some robust growth.

Economies have also been hit by security concerns, particularly from Islamist militant group Boko Haram which has carried out attacks in northern Cameron and elsewhere, disrupting economic activity and diverting spending from social programs to the military.

An “ambitious” reform agenda will be needed to bolster growth, which is estimated at 2 percent for 2015, down from earlier estimates of over 4 percent, Lagarde said on Friday. The bloc’s fiscal deficit is seen to have widened 6.5 percent of GDP in 2015, with only modest improvement expected in 2016.

The block’s growth is expected to hit 3.5 percent in 2016, still far below the growth of previous years.

Lagarde urged CEMAC members to rein in spending to reduce deficits during tough times and increase regional trade. Of all formal trade conducted by CEMAC countries, less than 5 percent involves intra-CEMAC commerce, according to the IMF.

 

(Reporting By Sylvain Andzongo, writing by Edward McAllister; Editing by Toby Chopra)

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How have crises become endemic in Northern Nigeria?

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“This is how the world ends. Not with a bang, but with a whimper.” The famous lines from T.S Elliot’s poem The Hollow Men was written concerning post-World War I Europe and the Treaty of Versailles five years after the Nazi Party became active in Germany. Elliot despised the Treaty of Versailles, and realized over a decade before World War II that the suffering and whimpers brought about by the Treaty of Versailles set the stage for a sequential buildup of events that would lead to disaster if unattended.

Setting the Stage for Disaster

In Northern Nigeria, this whimper has become endemic as vulnerability is worsened through each drought, food crisis, mass-displacement, and flooding. More often than not, local and international authorities only provide band-aid solutions: temporary measures that soothe the symptom without treating the infection. As a result, almost half of Africa’s most-populated nation has been trapped in a silent cycle of disaster, more vulnerability, and thus more disaster.

The link between disaster and vulnerability has been emphasized in recent decades as academics began to understand the significance of “the whimper.” In disaster literature, one of the most common analogies used to explain this link is that if there were no humans, it would not be a disaster: if a hurricane hit the South Pole no one would call it a crisis. And in terms of raw data, when disasters do occur the burden is disproportionately carried by the poorest. Since natural disasters lack the autonomy to pick their victims, vulnerability becomes the deciding factor in who gets hurt and who doesn’t. Critically, disasters are not a bang, or a freak accident. It takes years to form the necessary intervening conditions for disaster to occur.

Disasters depend on the social order, its everyday relations to the environment, and the larger historical matters that shape or frustrate these matters. In the north of Nigeria, power has historically been centralized in the Sokoto Caliphate, where political unity was designed to cleanse paganism from Islamic beliefs and discourage ethnic tensions. Kano was an economic hub even during Prophet Muhammad’s lifetime, and for centuries involved in slave trade, so in the 1600s when Europeans began arriving they partook in the pre-­existing West African slave trade by purchasing slaves from African merchants, eventually leading to the Atlantic slave trade. In 1850 it was estimated that 50% of the residents in Kano where slaves. Northern Nigeria was so invested in this trade that slavery was not made illegal in Nigeria until 1936. The grandchildren of these slaves now live in poverty in the North.

There are obvious trends moving south to north in Nigeria. The North has nearly double the poverty rate of the south, the judicial use of Sharia law, and a predominantly Muslim community. Life expectancy at 2001 was about 52 years with a total fertility rate of about 6.2 children per woman of childbearing age. A 2002 Core Welfare Indicator Questionnaire reveals that only 37% are literate, only 63% have access to quality drinking water, and about 40% have access to medical services. Within the demographics, we can see that the current residents are burdened with legacies of vulnerability in terms of access, income, education, and quality of life.

north nigeria

The Moment of Crisis

These whimpers of hazard, vulnerability, and intervening conditions set the stage for disaster since the 1600s, but also ultimately make up daily life for Nigerians. Before a crisis of extreme flooding in 2014, northern villages were in the grip of a food crisis, over 70% in poverty, many of whom were internally displaced due to 2013’s flooding. When the extreme event of moderate flooding is first superimposed, it acts as a catalytic agent, causing a chance encounter of all factors, and a failure of intervening conditions. This causes a deviation from the social norm, that moment of crisis that appears on televised news and captures the general public’s definition of “disaster.” And the carnage was dramatic: entire villages were literally washed away since houses of the poor were usually made of mud.

The International Red Cross was only able to offer short term relief (blankets, mosquito nets, water) to 3000 families and long term relief (gardening tools and seeds) to 800 families, which is helpful but on a small scale considering that over two million people in Nigeria alone were displaced from the flooding. The Nigerian government was unwilling to devote many of its resources towards recovery, citing the prioritization of other demanding issues.

Largely on their own, these rural communities rebuilt their houses out of the same mud, even poorer than before. Though the fluctuations in the natural/physical system are gone, their re­adaptation to nature is not buffered with intervening conditions to prevent a flood from happening again. The new norm that is established is even more vulnerable due to the failure of containment in the post­disaster response.

The Emergence of Disastrous Policy

There is an urgent need for a collaborative effort of both government and stakeholders to support town planning, engineering and other professional agencies to combat flooding in Nigeria to avoid its long ­range consequences. The tasks ahead are immense as these solutions must be implemented in the face of a multitude of problems, such as economic corruption, lack of infrastructure, and poverty.

But because these affected communities via disaster agents have become even more vulnerable, eventually the local and international authorities will grow impatient of always bailing out those who live at risk, thus their post-disaster response will become increasingly indifferent and ineffective, furthering the vulnerability conditions of the affected communities. Short-sighted solutions to whimpers are embroiled in good intent and disastrous consequences. Much like the Treaty of Versailles, there is a willing ignorance of how policies are paving a path to disaster: “this is how the world ends, not with a bang, but with a whimper.”

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South Africa’s net reserves tick up to $40.654 bil in December

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

JOHANNESBURG (Reuters) – South Africa’s net gold and foreign exchange reserves were at $40.654 billion in December, up slightly from $40.471 billion in November, Reserve Bank data showed on Friday.

Gross reserves also edged higher to $45.787 billion from $45.14 billion previously. The forward position, which represents the central bank’s unsettled or swap transactions, dropped to $1.424 billion in December versus $2.106 billion.

 

(Reporting by Stella Mapenzauswa; Editing by Himani Sarkar)

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Hydrogen Power in Mali

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Green power in Mali from hydrogen gas wells could power the future.

Hydrogen power refers to the use of hydrogen fuel as a zero emission fuel, since burning hydrogen with oxygen emits no carbon dioxide (only water). It sounds a bit futuristic perhaps, but the physics behind it are valid, though up until recently there have been very few practical examples. This is due to hydrogen power relying on either some kind of hydrogen fuel cell or on hydrogen gas, which until recent times, wasn’t believed to be in the earth’s crust in great quantities, nor in the earth’s atmosphere in clean or usable form.

In a new book about natural hydrogen entitled Natural Hydrogen: The Next Energy Revolution?, the the authors assert that natural hydrogen seeps or wells are abundant almost everywhere on earth and are a real viable alternative to fossil fuels. The book is written by acclaimed geologists Alain Prinzhofer and Eric Deville. With this new book it is clear that hydrogen power is no longer the technology of the future, but rather the technology of today.

In July 2015, three years after their first successful test, the Petroma Company demonstrated how hydrogen gas can be used to generate power, by lighting up part of the village of Bourakebougou not far from the capital Bamako in Mali, the eighth largest country in Africa. This has created almost 100% clean electricity in a poor rural area that did not have any access to electricity, something that would have hardly seemed plausible only a decade ago. In doing so, Petroma is not only reigniting the debate about alternative energy, it is also showing the world that even a poor African country can be innovative and turn to renewable fuels and prevent the massive pollution that comes with the fossil fuels used today.

The man behind this new venture into the field of hydrogen power is 56-year-old Aliou Boubacar Diallo, who is the president of Petroma Inc and also the leader of the Democratic Alliance for Peace. Aliou Boubacar Diallo is the driving force behind the new push for green energy in Mali, where he is a well-known player in not just politics and the energy sector, but also within gold mining and peace brokering.

HEC Feasibility Study

In the field of hydrogen engines, Petroma turned to well-known experts from the Hydrogen Energy Center in the US to perform a feasibility study. HEC is on the forefront when it comes to hydrogen energy and hydrogen power generators.

The study conducted by HEC was to check if it would be possible to harvest the hydrogen gas and use it in generators and generate at least 100 megawatts of power. Furthermore the study was to determine whether it would be better to have many small plants or one larger plant. The power would be used by local villages as well as the capital Bamako and its surrounding industries.

This study was the basis which Aliou Boubacar Diallo used to start the hydrogen power revolution in Mali. The first generator was built and demonstrated in July 2015 and will be followed by many more, as ten wells are on the way. Once those ten have been successfully installed, another almost 300 are planned in the first major phase of the project, quite possibly with more to come.

mali

Power in Mali

While Mali is a large country in terms of land size, it is a poor country with around 15 million people, of which half live below the poverty line. More than ten years ago Mali was already quite green by most standards, as half the country’s power came from the use of hydroelectricity, though only about half of the citizens could be reached by the network.

Today these numbers are not much higher, as expanding the hydroelectric capacity of the country beyond the current level is expensive and many locals are still not connected with the grid.

It was pure luck when Petroma found the hydrogen well at Bourakebougou, as they were in fact drilling to get water to the village. Instead of clean water they found almost pure hydrogen, which will continuously power the generator for as long as it lives, without exhausting the hydrogen gas. In fact, while scientists don’t fully understand this seeping hydrogen gas phenomenon, some believe it could be stable enough to last for thousands of years.

With the numerous massive and almost pure hydrogen wells already found in the country, it will perhaps be feasible to convert the country to almost exclusively to renewable green sources within a foreseeable future. This has proven almost impossible for much richer and more technologically advanced nations, as their power needs are much higher.

Time will tell if this adventure into alternative energy can deliver as much as it promises.

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Phuti Mahanyele: an inspirational black business woman

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Phuti Mahanyele

Phuti Mahanyele – an inspirational black business woman who believes that the poor representation of women in the boardroom of major businesses in the private sector is “not just a social injustice but an economic and business imperative”.

Phuti was born in Dobsonville, Soweto, South Africa on March 15th, 1971, however she largely grew up in the Claremont township outside Durban. Her mother died at the age of 42 in 1989 when Phuti was 17. Phuti has since acknowledged that this was a major turning point in her life as it made her for the first time realize how short life can be and why it is therefore so important to never take it for granted.

Throughout her life her parents continuously advocated the importance of education, never differentiating between their sons and Phuti and her two sisters.

Her father: a pioneer for the improvement of black education

Her father, Professor Mohale Mahanyele, was a successful business man and pioneer for the improvement of black education. Whilst the Chairman of the National Economic Education trust, he ensured that thousands of young people progressed into tertiary education. Throughout his life he refused to accept the fact that just because a child came from a home with insufficient funds to afford expensive higher education fees, they were not entitled to it. During his life he could have become one of South Africa’s richest men however he was never interested in making easy money, and instead believed in reinvesting both his money and time back into the people and places he loved.

Phuti was educated in Johannesburg until she was 17, at which point she moved to the United States where she attended Douglass College in New Brunswick, New Jersey. In 1993 she graduated with a degree in Economics and then went to De Montfort University in the United Kingdom where she obtained an MBA on “The Impact of International Trade on Black Economic Empowerment.” Her education didn’t end here because in 2008 she completed a course called “Global Leadership & Public Policy in the 21st century” at Harvard University.

Early career

Phuti’s first job was at her father’s company, National Sorghum Breweries, however whilst she admits to being very happy at this time of her life, she also confesses to feeling unfulfilled. After two failed applications she finally won an internship at Fieldstone – an investment banking firm in New York. After a difficult start, she flourished and achieved the position of Vice President before leaving 7 years later, at which time she moved back to South Africa.

Her next job, running the Project Finance Unit for the Development Bank of Southern Africa proved to be less successful and she left after only a few months. Looking back, she admits that it was a bad fit for her and not an environment she could continue to work in.

Whilst looking for other work she received a telephone call from Cyril Ramaphosa, the Chairman of a then relatively small company called “New Africa Investments” which became the Shanduka Group.

Shanduka Group

Phuti originally joined as the managing director of Shanduka Energy in 2004 and eventually went on to become the CEO of the Shanduka Group. It was whilst working there that she truly found her passion.

She has since admitted to finding Cyril so inspirational on their first meeting that she agreed to work with him even before she knew what the job and salary was.

Phuti speaks of the amazing culture and work ethic at the Shanduka group, admitting that Cyril’s astonishing humility and ability to inspire was fundamental to this. She has always felt hugely responsible and accountable to her community and working at the Shanduka Group allowed her for the first time to give something back, as the company, unlike so many others, didn’t just focus on the profit for shareholders.

 

Business pillars and key successes

Phuti adheres to 3 business pillars: understanding herself including her spiritually; understanding any issues affecting her staff, personal and professional; and ensuring she has all the information she needs at all times in order to be able to drive the business forward

When appointed CEO, her key priority was to ensure that the business moved some of its investments into areas that were less market sensitive, as she saw this as a way of ensuring the growth and security of the company’s investments in years to come. During her time at Shanduka she helped increase the company’s net asset value to approximately R8billion. Major deals driven by Phuti with Coca-Cola and McDonald’s were key to this success.

After 10 years at the Shanduka Group, Phuti has achieved a lifelong ambition and with the support of her business partner Jeremy Katzen, a highly experience banker from Johannesburg, has launched her own investment company called Sigma Capital.

Major influences on her life

Phuti often cites her family, notably her father as a major influence in her life, however she also frequently talks about the huge impact Cyril Ramaphosa has had on both her business and professional life.

Her parents taught her how to see beyond problems and challenges and to remain positive at all times. Phuti believes that every single person on earth has a purpose and that they are obligated to discover what it is and then achieve it.

Life changing experience

Whilst attending a meeting in London, in 2013 Phuti was experiencing severe headaches, however she assumed it was just due to tiredness and tension. Whilst out shopping after the meeting she fainted, it was at this time she first sought medical attention. She was told to rest and returned to South Africa the following day, however on arrival she ignored the advice and went back to work where she then fainted again. When she woke up in hospital she was surrounded by friends and family, all of whom she didn’t recognize. It was at this time that she was told that she’d actually suffered from a stroke, hence her loss of memory.

Although she has now made a full recovery, the experience has changed her. Whilst she still has her incredibly high work ethic and puts in long hours, she is now also committed to finding a better work/life balance by valuing the importance of friends and family and not just achievements. She is in fact now engaged again (having already been divorced twice), and is learning to cook and play the piano. She admits to being excited and is looking forward to being a better wife and stepmother. “I feel ready to be a wife now”, she said.

When Phuti was asked what she would most want to be remembered for she said, “for having given as much of myself as I possibly could”.

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Somalia resumes banana production, hopes to grow exports

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The banana industry is making a comeback in Somalia after two decades of war devastated its leading export.

The East African country’s fledgling effort faces significant challenges, including lack of irrigation and storage infrastructure as well as a wait-and-see attitude of potential export partners abroad who are mindful of Somalia’s recent history of violence and instability.

While most of Somalia’s current crop goes to local markets, exports have begun to Middle Eastern countries including the United Arab Emirates.

About 40,000 tons annually

Currently, Somalia has about 4,000 acres in cultivation, producing about 40,000 tons annually, according to FruitSome, a company formed by about 100 growers to market Somali bananas abroad.

The current planting is less than 14 percent of the 30,000 acres that were in cultivated when the industry was at its peak. In 1990, before the war began, Somalia was the largest banana exporter in East Africa. Banana exports accounted for about $96 million and produced Somalia’s leading source of outside income.

“Prior to 1991, Somalia was renowned for its thriving banana industry. However, insecurity, lack of inputs, and poor infrastructure, has over the last two decades led to a devastating decline and eventual collapse of banana exports,” according to the Food and Agriculture Organization of the United Nations, which is providing assistance to the Somali banana industry.

Irrigation and production infrastructure destroyed during the war

The military government of Somalia was deposed by rebels in 1991, throwing the country into chaos, especially in the south, where bananas are farmed, and in the capital of Mogadishu. During the fighting, irrigation and production infrastructure was destroyed and banana growers lost access to export markets as pirates operated off the coast of Somalia. Drought and famine exacerbated the hardships in 2011.

An internationally backed central government was installed in 2012 and the nation has slowly become more stable, although insurgents of Al-Shabab, an Al-Qaeda ally, continue to operate in Somalia.

Growers, many of whom fled to refugee camps in neighboring countries, have begun to return to farms they were forced to abandon during the violence.

Lack of refrigerated storage: another challenge

“This place was a bush a year-and-half ago. We cleared the bush and now more than hundred people work here every day,” Omar Osman, a farm manager in Afgoye, said.

“Things are calm. Thank God. Us, Somalis, we have to make use of God’s blessings. This country has everything and now it is possible to make use of the land.”

In addition to clearing brush and replanting, growers must reconstruct irrigation systems destroyed by fighting factions. Lack of refrigerated storage is another challenge.

The UN Food and Agriculture Organization (FAO) has provided direct food aid to families in Somalia as well as assistance in restoring and increasing food production, including seed and land preparation services as well as farmer training.

Turkey to help Somalia

The FAO also developed several virus-free banana varieties, and Somali growers chose one, William, that is tolerant to virus attacks and drought. The FAO began making seedlings available to growers in 2012.

Turkey has also undertaken efforts to help Somalia rebuild its agricultural and fisheries sectors.

“If invested well, Somalia’s fisheries and agricultural sectors can feed the entire Africa,” said Galip Yilmac, the Somalia program coordinator with the Turkish Cooperation and Coordination Agency (TIKA).

Banana exports resumed in 2014 to Middle East markets including the United Arab Emirates. The FAO said Iran and Turkey also expressed interest in Somali banana imports.

But the Somali growers also face skepticism from some quarters. Dole, for example, invested in Somalia in the past. But a representative of the company said “right now it seems difficult to develop any agriculture program in Somalia because of the local situation.”

Somali’s bananas sold in local markets

For now, most of Somali’s bananas are sold in local markets, and livestock has replaced bananas as the country’s leading export. Other exports are fish, charcoal and scrap metal. Export partners are the United Arab Emirates, Yemen and Oman.

Somalia has a population of 10.8 million. Its 2013 GDP was $1.4 billion, according to the United Nations.

Italian colonists introduced bananas to the fertile Shabelle and Juba river valleys of southern Somalia in the 1920s. The industry grew steadily and it peaked in the 1960s. Somali bananas are known for their sweet taste and creamy texture.

Rebuilding Somalia’s banana industry

FruitSome, the company formed by banana growers in 2012, is looking to increase exports, primarily to Europe and the Persian Gulf.

“Close to a hundred farmers are still registered as members of the banana growers association. They have been hoping to be able to export again but drought, civil war, social unrest and a shortage of irrigation infrastructure has so far made it impossible to revive the industry until very recently when the country has begun to re-emerge socially and politically, supported by international partners,” FruitSome said.

Despite the challenges, the FAO was upbeat about prospects for rebuilding Somalia’s banana industry. “With peace slowly returning to southern Somalia, this makes investment in the banana industry a key priority for FAO and its national and international partners,” the UN agency said.

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Somali Pirates Re-Imagine Governance

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Somalian pirate

A captured pirate was brought before Alexander the Great. How dare you pillage the sea? asked Alexander. How dare you pillage the whole world? the pirate replied, and continued: Because I do it with only one ship, I am called a thief, you, doing it with hundreds of ships, are called an emperor.Noam Chomsky

In the early 1990s, commercial foreign fishing vessels and trawlers began working off the Somali shore, invading sovereign waters and exclusive economic zones. Not only did they displace local fishermen, but the illegal over-fishing by these foreign companies severely depleted the fish stock and greatly reduced the long-term health of Somalia’s fisheries through over-exploitation. Greedy international fishing companies with illegal fishing technologies, in an eventual case of reverse irony, “pirated” Somali fishing stocks for illegal profit. Estimates place the foreign fishing poaching at $300 million USD every year, an astronomical sum considering that this occurred for over a decade. Put in scale, if only one year’s worth of the illegal poaching was returned to Somalia, the GDP would rise by over 5%. While poachers were moving in from Europe and Asia, European ships also went to Somali waters to illegally dump toxic industrial waste, another major violation of international law. The UN Environmental Program reports that the nuclear waste dumped on territorial shorelines caused sickness and disease in Somali coastal cities, and killed off the little fish that were left. These disenfranchised fishermen, left only with their boats and nautical expertise in the Gulf of Aden, would soon become the notorious pirates of Somalia.

The pirate economy is a considerable source of employment and income

For Somalis who live in coastal communities, the pirate economy is a considerable source of employment and income: there is a need for crews directly involved in the hijackings, and a local ground crew to guard captured moored ships. Among this exercise are entire administrative, legal, and financial teams, a network of financiers and shareholders, and guards to police the territory in which the pirates reside.

Interviews with former pirates suggest that typical crew men make between $30,000-$75,000 USD per haul, with a $10,000 bonus for the first man to board the ship, as well as bonuses for other displays of initiative. This is an astounding sum considering that the 2012 GDP per capita in Somalia was $128 in current USD. Pirates also face heavy fines for bad behavior, such as non-consensual sex or mistreating other crew members, which carries a $5000 fine and dismissal.

Between 2004 and the first quarter of 2009, Somali piracy rose from 3% to 60% of the global total of piracy attacks, with revenue growth almost quadrupling from 2008 to 2009. Somalia, like other states where piracy occurs, lacks the capacity to patrol its waters; thus Somali pirates have equal advantage to other pirates in terms of access to un-patrolled coastlines, and yet Somali pirates remain disproportionately successful on a global scale.

Attacks reported as far as 600 nautical miles from Mogadishu

And uniquely, these huge gains are not made in Somalia’s territorial waters, but in international territory, with some attacks reported as far as 600 nautical miles from Mogadishu, where the presence of armed guards, unregulated security measures, and international navies act as a powerful and permanent deterrent to pirates from other countries. This unique capacity demonstrates that the assumption that piracy simply exists due to weak statehood in protecting territorial waters does not fully explain the pervasiveness and huge growth experienced by the Somali pirate enterprise.

Somali pirates view themselves as the protectors of their territorial waters, with group names like “National Volunteer Coastguard of Somalia,” arguing that their ransoms are taxes levied in absentia of their defunct government. At the same time, supporting the ransom system and their Robin Hood enterprise is not a sustainable solution either: Somali pirates’ astounding capacity for growth and entrepreneurship suggest that increased revenues will result in better arms and equipment, increasing the likelihood of further attacks.

As ransom demands continue to rise, by the time Somali piracy becomes unaffordable the power of the pirate enterprise will be impossible to contain, let alone eliminate. This burden will be borne by the shareholders, crew members, and global consumers who depend on the 90% of world trade which is now moved by ocean. The problem must not be approached from the outside through militant suppression, or through the path of least resistance in paying a ransom. The situation demands a new and creative approach; using power structures that exist locally in pirate and traditional systems to build a government that meets the needs of both the local and international community from the ground-up.

Not a realistic solution for Somalis

Somali people do not identify themselves through a sense of nationhood, but a sense of kin, an indigenous six-thousand-year-old framework of social organization that was forged by the harsh terrain and nomadic lifestyle demanded by the barren Horn of Africa. As kinship emerged as the most effective form of social ordering in this environment, the clan acted as the largest unit of political organization, and legal and political institutions sprang from this system. The 400-year-old history of peaceful cohabitation among these clan polities demonstrates the efficacy of this form of governance. The centrally bureaucratic and non-personal structure of the state system is the polar opposite of the political realities and imagination of self in Somalia. The model of the nation-state, and forcing these clans together though imported institutions will never be realistic solution for Somalis.

Is self-governance possible?

The presence of pirates and other autonomous regions in Somalia signifies that there has been a shift in the modern political conception of authority and sovereignty: why is local authority less legitimate than authority granted by the international community?

Though mainstream political discourse assumes that self-governance could never facilitate order between members of different social groups, the relative stability piracy offers provides support for cooperative relationships between clans. Despite ubiquitous potential for conflict, pirates rarely fight, steal, or deceive each other. In Somalia, cooperation has always been essential for survival- especially today.

The pirate’s appropriation of the clan-system of leadership demonstrates that to some degree, state-building is possible in Somalia as long as people work with the way authority is recognized in the Somali imagination. Somalia’s history of fourteen failed foreign interventions demonstrates that traditional Western state structures are imperfect and do not comply with indigenous customs and institutions. However, the continued attempts to establish a centralized polity demonstrates that central governance is the type of entity the West is most comfortable dealing with.

Somalia isnt a state

Current political thinking assumes that Somalia is a failed state; therefore the logic infers that at one point Somalia was a state, which it never was- in reality, “Somalia” as a nation exists purely as fantasy and is perhaps one of the greatest untruths ever sold.

And if piracy is due to failed statehood, then the automatic conclusion is that the solution to piracy is statehood. This logical framework is at the heart of foreign policy towards Somalia and characterizes the nature of every intervention that has occurred. However, UN satellite maps of pirate activity indicate no clear relationship between political stability in post-state Somalia and the emergence of piracy. The presence of pirates in Somalia demonstrates that the failure does not lie in the condition of a failed state, but instead the imagination of failed statehood itself.

These repeated representations of the ‘failed state’ work to legitimize the concept, despite the inherent limitations and flawed assumptions that obscure its utility. And at the heart of this is Western universalism, as the construction of the failed state dichotomy finds its foundation on the West’s fixed standard of what they perceive to be a successful state: democratic, centralized, and transparent. It is at its core an imposition of political ideologies put forth through the humanitarian pretensions of the failed state rhetoric. Until this is understood, the international community’s disregard that alternative models of governance can succeed will continue to impede our larger goals of world peace and stability.

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Nigerian interbank rate eases on liquidity boost

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

LAGOS (Reuters) – Nigeria’s overnight lending rate eased marginally to 0.75 percent on Wednesday from 1 percent in the last five weeks after the central bank refunded cash set aside by banks to buy dollars.

Traders said the impact of the refund and anticipated injection of additional cash from November budgetary allocations to states and local government also helped to reduce cost of borrowing among banks.

However, the secured open buy-back (OBB) — the rate at which lenders can borrow from the interbank market using treasury bills as collateral — held flat at 0.5 percent it has traded in the last five weeks, far below the central bank’s benchmark rate.

Traders said about 300 billion naira additional funds are expected from the budget disbursal before the close of business on Wednesday.

They said although market liquidity dropped to around 230.5 billion naira on Wednesday from 400 billion naira on Friday, it was expected to rise again helped by the refunds and possible budget disbursals.

“We expect the cost of borrowing to stay flat for the rest of the year as most businesses wind down and tidy their books for the financial year ending,” another dealer said.

The Nigerian money market reopens next Tuesday.

 

 

(Reporting by Oludare Mayowa; Editing by Raissa Kasolowsky)

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France’s Total eyes fuel stations in Angola, signs MOU

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

LUANDA (Reuters) – France’s Total has signed an memorandum of understanding with Angola’s Sonangol, a first step to opening fuel stations in the southern African nation, Total told Reuters on Wednesday.

Angola, the continent’s second biggest oil exporter, said in October it is reorganising its oil sector and state-owned Sonangol, but details about the changes have been sparse.

Total, the largest foreign oil company producing in Angola, said the MOU was signed by chief executive Patrick Pouyanné on Monday and paves the way to a network of Total-branded stations in Angola.

“In a first phase, products would be obtained through Sonangol,” said a Total spokesman.

Sonangol has a refinery in Luanda that produces 56,000 barrels per day.

The state-owned company said in a separate statement the agreement could represent an investment of hundreds of millions of dollars, with benefits both immediate and long term.

“This action, via a consolidated partnership between the two companies, embodies the government’s strategy to liberalise trade in the sector,” Sonangol said.

Total said it will give more detail once the shareholder agreement with Sonangol is signed.

Angola’s finances have suffered as a result of a sharp slide in oil prices since mid-2014 as oil output represents 40 percent of its gross domestic product.

Sonangol is under pressure to show how it is boosting the downstream potential in Angola, which is a major producer of crude, but does not refine enough to meet its own fuel demand.

 

 

 

 

(Reporting by Herculano Coroado; Writing by TJ Strydom, editing by William Hardy)

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Nigeria orders MTN to pay $3.9 bil fine by Dec 31

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ABUJA (Reuters) – South African mobile phone operator MTN will have to pay a $3.9 billion fine imposed by Nigeria for failing to disconnect users with unregistered SIM cards by Dec. 31, a source in the Nigerian telecommunications regulator said on Wednesday.

Nigeria’s telecoms regulator had cut the fine from an initial $5.2 billion after weeks of lobbying by Africa’s biggest mobile phone company to get it reduced.

“Appropriate action will be taken,” should MTN fail to meet the deadline, the source said, asking not to be named and giving no further details.

MTN said this month it would challenge the decision in court.

Nigeria has been pushing telecoms firms to verify the identity of subscribers amid worries unregistered SIM cards were being used for criminal activity in a country facing the insurgency of militant Islamist group Boko Haram.

The fine came months after Muhammadu Buhari swept to power in Africa’s biggest economy following a campaign in which he promised tougher regulation and a fight against corruption.

 

(Reporting by Felix Onuah; Writing by Ulf Laessing, editing by William Hardy/Keith Weir)

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