Politics

Mon,18Jun2018

Politics

Interview: Nuruddin Farah, Somali author and journalist

 

Somalia’s best-known novelist, Nuruddin Farah, explains his often controversial themes in the context of his relationship with ?the troubled country of his birth

 

“It is preferable to be the hand above than the one below,” says Nuruddin Farah, quoting the Koran to me as we meet during a break between his scheduled readings and dialogues with other writers at the Berlin Literature Festival. Earlier, the Somali author of Links, Gifts and Knots, and winner of the 1998 Neustadt International Prize for Literature, had cut a lonesome figure on stage as he surveyed the crowd at this year’s Africa-focused festival. Facing an audience fed on endless horror-images of his country, Somalia’s ‘voice’ looked as if he knew there was little he could do in the allocated half-hour reading slot to alter the perspectives of a young European crowd.

 

?When the host asked why he had stirred such controversy in Somalia with his writings, Farah replied with an anecdote. “A mother longs for a child; at last one is born to her and the mother soon wishes it to speak. The child grows and reaches the age of three but still it doesn’t talk. The mother implores everything, making sacrifices so that her child will speak. But still the child at six years old is mute. The mother carries on praying and finally, when the child is ten, he speaks, saying: ‘Mother, I want to make love to you’.” The audience sat up, electrified. His point was that a nation cannot choose its voice, nor a voice its nation. ?

 

Farah has lived out of Somalia since 1976, when he went into exile having made an enemy of the dictator Mohamed Siad Barre. His first novel, From a Crooked Rib, which narrated the story of a young girl challenging traditional beliefs about women in Somali society, and his first of two trilogies, Variations on the Theme of an African Dictatorship, earned him a reputation as a controversial voice in his homeland. Since then, Somalia has suffered the misfortunes of a fluctuating and often ravaged 30-year history of dictatorship, civil war, foreign intervention and, most recently, the ongoing violent struggle between the Union of Islamic Courts (UIC), the Transitional Federal Government (TFG) and Ethiopian forces. Farah himself is no stranger to this political turmoil, having mediated between the parties involved. ?

 

Tea with the courts

 

?“It’s something that I hadn’t in mind to do, but I did it first of all because one of the Islamic Courts people approached me and said, ‘We know that you are not a religionist, an Islamist, in that sense, we know that you are more of a secularist than a religionist. And for that reason, we would appreciate it if you came to Mogadishu, became our guest, and then spoke to the two parties, since we are both, the two of us, preparing for war.’”

 

?Farah, who lives in Cape Town, promptly returned to Somalia in August 2006, carrying messages between the UIC representatives in the capital and the leader of the TFG in Baidoa, President Abdullahi Yusuf. Farah’s trips, he recounts, engaged him endlessly in trying to encourage all parties to pursue national priorities and put aside personal hatreds and goals. However, the author of Gifts – the second novel in the Blood in the Sun trilogy – redrafted the criteria of his own ‘intervention’.

 

?“I did not want to accept the hospitality of the Islamic Courts, basically because I knew that once you are given a gift, you become vulnerable; you are in the pocket of the giver.” What initially seemed a gift turned out to be a stalemate. “I don’t know if there was much success, but at least there was the initial belief that a truce was starting to crop. In the end it didn’t work because I had no endorsement, national endorsement, from anyone nor was Ethiopia interested in there being peace in Somalia.”

 

?In Gifts, the author leads his readers behind the material gift to explore the identity of the giver. Farah skillfully breaks down the dichotomy between giver and receiver: from the gift of a woman’s body to a man, to the gift of American aid to Somalia or the gift of an orphaned child found in the street. “A basic theme of the novel is that there is no gift that is pure. Every gift has something attached to it,” says Farah, who subtly ridicules the hypocrisy of gifts of aid by European states to African nations, which are strangled by debt owed to the very same givers. Gifts are presented as a symbol of power between giver and receiver, the former having the ability to dictate the process.?

 

A win/lose situation for the receiver and the faceless shadow of the giver seem to be the key elements in Farah’s thesis. “The big difference between an institution like the EU and a person-to-person relationship is you never meet the giver when you are dealing with an institution.” Farah chooses his words carefully, a soft-spoken man with powerful delivery. “If you give me a cup of tea, I can say ‘thank you’ to you,” he continues. “But if you order a cup of tea or a glass of wine for me, and just after you order, you vanish, then the waiter comes and offers me the glass or cup of tea and I say ‘Where is this from?’ and he says ‘Oh, some gentleman came and gave it to you and left’, you may still drink it but you would feel a little uncomfortable. So it is also that distance comes as a result of continuously receiving gifts.” ?

 

When I counter that institutions might retort that aid is often lost in corruption scandals and that accusations have been made regarding a ‘culture of bribes’, Farah is quick to respond: “You know, there is nothing clean about Western European institutions. What I mean is that they are no less corrupt than any other. The big difference is that the majority of Africans, when they are corrupt, we put a moral tag to corruption. A moral tag in the sense that we say it’s like taking food out of a child’s mouth.” Pointing to an article about $300m payouts to CEOs of collapsing banks in America he adds: “The corruption in Africa is just peanuts compared to this kind of sum.” ?

 

Poisoned chalice?

 

Yet ‘American gifts’ are something Farah sees as a two-edged sword. When Somalia and the US are even mentioned in the same breath, the macabre media spectacles of US marines being dragged through the streets of Mogadishu or, more recently, the sensationalist media approaches to Islamic extremism, seem engraved throughout Africa and the West. Farah challenges that singleness of imagery in his novel Links, which carries its reader, through its returning Somali protagonist Jeebleh, and traversing the war-ravaged and clan-divided streets of Mogadishu, deconstructing the myth of a ‘clan’ or ‘blood war’. Jeebleh has returned to pay respect to his mother’s grave and to assist his old friend, Bile, in resolving the kidnapping of a family member. Soon, however, Caloosha, a general in ‘StrongMan’s South’ sector and Bile’s half-brother, resurrects old feuds from the past between Jeebleh, Bile and himself in an intricate web of connections.?

 

Farah presents a world in which militants raised in hate and driven by murder have led astray a generation of young, uneducated and disenfranchised teenagers, who are both victims and perpetrators of the clan ideology. Links denounces a nation where role models and tradition have gone astray. Farah has spoken of Somalia as an ‘orphaned nation’ before, and his recent novels Knots and Links echo a desire for reconciliation and greater knowledge of self vis-à-vis nationhood. ?

 

“One of the reasons why I wrote Links, which is about a particular incident that took place with American corpses being dragged through the streets of Mogadishu, is because I thought I should show the other side of the story that happened in contrast to Black Hawk Down, both the book and the film.”?

 

Farah, the author of ten novels, several plays and the editor of an anthology of Somali diaspora writing (he has also written journalism), is getting older, his voice fading. Yet his appetite – to silence the dominant image of Somalia as a violent backwater of the world and for his nation to write back through his words – is unabated. “People can do anything they like when it comes to Africa, in the belief that they will not be challenged by the people about whom they are writing,” says Farah with some sarcasm and a certain melancholy. “Quite often my friends ring me or send me emails, or electronic articles, and then they say: ‘This is the interesting article we want you to read about Somalia.’ And I might find an entire page written and yet I may not be able to find a single paragraph that makes sense. And the reason is because the majority of people write from a distance and they also write from a position of ignorance… It is different when you say: ‘It’s wrong, it’s full of violence, and these are the reasons.’” ?

 

Farah is no stranger to violence himself and has endured several threats to his life. However, it is the endless misconceptions about Somalia that continue to haunt him. “Many of the journalists [writing about Somalia] are foreign journalists that haven’t got the courage or the knowledge to write about Somalia and go beyond the cliché. The majority of things that are being said about Somalia and Somalis are clichés. Somalis then repeat those clichés like ‘everything to do with the Somali civil war is clan-based’ and such lies. It’s a lot more complicated than this. I would say it is personality-based.”?

 

While Farah admits he sees little prospect of peace in the near future (“conflict is part and parcel of this century”), he remains Somalia’s most accomplished and distinguished modern novelist, a voice “that writes to keep my country alive”.

Djibouti's dream of a bridge

 

Twin ‘Cities of Light’ are to be built on opposing shores of the Red Sea in Djibouti and Yemen, linked by a 28km suspension bridge. The brainchild of Sheikh Tarek Bin Laden (the estranged brother of Osama), this $25bn ‘Bridge of the Horns’ will directly link Africa with the Middle East, and hopefully spur much more trade between the two regions.

 

?The dream is one of generating wealth. Bin Laden and his project team, Al Noor Holdings, plan cities that will house tax-free businesses and industries providing hundreds of thousands of jobs and a plethora of tourist attractions. And all for a price tag of $300bn – something of a tricky proposition, as neither Yemen nor Djibouti could contribute much from their own coffers. And so everything depends on major Arab investors getting involved.?

 

Construction project teams are on standby for confirmation of construction of the bridge, which could begin by the end of 2009 if the green light is given. The project team, led by US firm DCK Worldwide, could provide construction jobs for as many as 300,000 workers from all corners of Africa and Asia.

 

Back to Infrastructure, Sustaining the momentum for modernisation

Algiers Metro nearly ready

 

It has been stopped in its tracks once before. When oil prices fell in the early 1980s, the Algiers Metro was dropped from the government’s project schedule. Now, even though oil producers like Algeria are once again preparing for leaner times ahead, the Metro has advanced beyond the point of cancellation. Services under the city, linking 10 stations along a 9km underground route, are set to begin at the end of August 2009.?

 

Entreprise du Métro d’Alger (EMA) has tapped the professionalism of France’s RATP Développement – a subsidiary of the Paris Metro operator – to work the line. In turn, RATP has hired Siemens Transportation Systems France to maintain much of the essential equipment, including signalling and communications. Siemens has already been involved in providing the tracks and electrification plus fare collection and operational control equipment. As much of the tunnelling was done at an earlier time, France’s Vinci CGP took on the task of completing the Metro stations, installing tunnel ventilation and other infrastructure, while Spain’s CAF has been supplying the 14 trains that will deliver the service to around 40,000 commuters who are likely to use it each day.?

 

EMA has also contracted a consortium led by Alstom to launch a tram system heading east out of the city from El Annasser to Bordj El Kiffan, along a 16km track with 30 stations. This could serve much larger numbers of people than the Metro, with current estimates at 185,000 passengers a day. Both the Metro and the tramway are meant to be extended once consumer demand grows in the future. And Algeria’s other large cities of Oran and Constantine are building tramways too.

 

Back to Infrastructure, Sustaining the momentum for modernisation

Infrastructure: Maintaining the momentum for modernisation

 

All kinds of infrastructure are clearly needed if African economies are to modernise successfully; and there is now an emerging consensus on how to go about it

 

Some of Africa’s milestone transportation projects, like the Gautrain commuter line in South Africa’s Gauteng Province and the new Algiers Metro, are setting the pace for better transit management for major cities, but huge challenges lie ahead in achieving efficient transport and other infrastructure coordination in this continent of 53 countries, of which many are landlocked.?

 

On the continental level, the good news is that national and international agencies are beginning to work together as never before and that public and private sources of finance are finding common cause in opening up the continent’s enormous economic opportunities. Even in these difficult times for the world economy, Africa’s frontier markets provide attractions for private finance.?

 

The momentum of expansion has been positive and unprecedented. Total commitments by bilateral and multilateral members of the Infrastructure Consortium for Africa (ICA) reached $12.4bn in 2007, an increase of 61% over the $7.5bn committed in 2006. Also in 2007, China made commitments of $4.5bn, while Arab countries and India committed $2.6bn and $700m respectively.?

 

Outperforming all of these predictable sources of finance was the private sector, which came up with investments in excess of $20bn in 2007. The ICA noted that around 50% of these investments will have been in North Africa, and many more in South Africa, but concluded that “the trend for the continent is positive”.?

 

ICA coordinator Alex Rugamba is confident that “in the short term, Africa is to some extent insulated” from recent developments in the world economy, “even if in the medium term they could reduce flows from both public and private sources”. “Overseas development assistance (ODA) is not yet at risk and we hope it won’t be,” he told The Africa Report, “but in any case it is more of a catalyst than a total solution.”?

 

The big-picture evidence is that “private finance for infrastructure in Sub-Saharan Africa (SSA) has come from almost nowhere in the mid-1990s to become a source of finance comparable in magnitude and importance to ODA,” according to the World Bank’s forthcoming Africa Infrastructure Country Diagnostic (AICD), due for publication in early 2009.?

 

“Some areas of infrastructure (mobile telephony, power generation, ports) have been much more successful than others (roads, power and water distribution) at capturing private finance,” the AICD adds.?

 Djibouti's dream of a bridge

 

Drive across the red sea.
Read more. 

 

Several new reports still assess Africa’s infrastructure needs over the coming decades in challenging terms. Policy-makers meeting in Washington in October were told that the financing gap still stands at $35bn a year. The World Bank’s vice-president for Africa, Obiageli Ezekwesili, said: “Africa’s infrastructure deficit is hindering economic growth and sustainable development.”?

 

Demand for everything

 

?A recent economics paper from Goldman Sachs calculates that in a sample of 12 African countries, total infrastructure demand over the next four decades will amount to $1trn, of which Nigeria alone will need $360bn. “Across the range of sectors (mainline telephones, paved roads, mobile telephony, electricity, air travel and internet use), demand for electricity and mobile phones dominates: each averages over 30% of total infrastructure demand from 2020 onwards,” the paper says. What is fresh about the Goldman Sachs approach is that it insists that the increasing urbanisation of Africa will create real demand: an insistence by the population that its needs for water, power and roads be met.?

 

In the changing economic realities, African governments will need to reassess their strategies. The ICA’s Rugamba thinks that the state of the financial markets will make it difficult, though not impossible, for East Africa’s governments to proceed with their recently-floated plans to sell infrastructure bonds. Norman Anderson, CEO of the CG/LA Infrastructure consultancy, says the public sector and the multilaterals will now have to get more involved. “The world will work through this situation with the help of significant infrastructure investment, as it is a way of building for the long term, rather than just for short-term gain,” he told The Africa Report. “Governments will have to do the backstopping.”

 

?For the moment, progress is still a patchwork of different initiatives in different countries and regions, plus emergency responses to obvious backlogs. And even as the world’s financial system plunged into its worst crisis in 80 years, a series of structured financings across a range of sectors in Angola, Democratic Republic of Congo (DRC), Ghana, Kenya, Nigeria and South Africa were still moving ahead.?

 

“In a nutshell, there has been no major slowdown in financing for African projects,” said Ato Gyasi, head of infrastructure at South Africa’s Rand Merchant Bank. “The credit squeeze in Africa is certainly more evident – and banks are seeing some liquidity constraints – but there is still strong appetite for African infrastructure projects, which – due to Africa’s relatively high-risk profile – tend to be economically robust and well-structured assets, when they do come along.”

 

Local partners

 

?South Africa has at least ten public-private partnership (PPP) projects set to come to market for rand-denominated 20-25-year financings in sectors like prisons, hospitals, roads and accommodation, Gyasi said.?

 

External finance fo infrastructure in SSAWhere European and US banks have pulled out, African banks have moved in. Project financing for Nigeria’s 9291m Lekki toll road in Lagos State provides one example. Four tranches of debt are involved, including money from the African Development Bank (AfDB), Standard Bank and leading Nigerian banks, and it has been able to proceed without political risk insurance. “The transaction marks a genuine precedent that has been followed closely by the Nigerian federal government and other Nigerian states,” said Jonathan Wood, head of infrastructure finance at Standard Bank. “It should give Lagos the confidence to do other things with the private sector in areas such as power and transportation.”?

 

“From an infrastructure perspective, the palatable Nigerian options are PPP initiatives, including concessions on sensible terms that make returns attractive enough for investors to be interested,” said Chuka Mordi, head of infrastructure at Nigeria’s First City Monument Bank. “The private sector is needed to ensure efficiency, as the government is too bureaucratic and incompetent for large-scale projects.”?

 

In Kenya, where the recent political violence caused upsets to the system, development finance institutions from France, Germany and the Netherlands have been called upon to provide $90m in 15-year finance for the 90 MW Rabai power project, suggesting that commercial banks have tended to be more cautious. This and a new geothermal project should now be financed before the end of 2008.?

 

Electric power crises in a large number of countries, and especially South Africa, have begun to focus governments on the need to agree commercial power tariffs in order to move vital projects forward. One senior banker has noted new demand for independent power projects in both Ghana and South Africa.?

 

Another major source of stimulus for African infrastructure projects has been the substantial private investment in extracting raw materials, as for example in the copper mines of DRC and Zambia. Major new electric power and railways investments are on the table for both countries. Banks have been ready to arrange finance in the wake of commitments like that made by Australia’s Equinox, which has invested around $600m in the new Lumwana mine in a previously undeveloped region of Zambia.?

 

Oil for roads

 

?Natural resources also provide the fundamental rationale for China’s increasing involvement in developing African infrastructure. China’s Exim Bank, providing loans on concessional terms, is currently supporting around 300 projects in Africa, of which 80% are for infrastructure development. China Development Bank, lending on commercial terms, is also heavily involved and manages the $5bn China-Africa Development Fund.?

 

Most African infrastructure projects are of a national nature and will stand or fall on the level of commitment made by individual African governments. In Nigeria, for example, there is still a long way to go for a succession of ongoing electric power projects to see the light of day, even though investors and contractors are lined up, because the institutional frameworks remain vague. Disputes between the Abuja government and a Chinese engineering company have also prevented progress on an $8bn railway rehabilitation scheme.?

Algiers Metro nearly ready

 

10 stations and 9km of underground
metro are due to open in August 2009.
Read more

 

The prospect of advancing African progress by means of greater cross-border collaboration between governments has, however, captured the imagination of the ICA, the AfDB and certain major donors such as Japan. The Japan International Cooperation Agency (JICA) is working on cross-border roads, power development and regional power linkages. It has helped establish ‘one-stop border posts’ between Kenya and Tanzania and between Zambia and Zimbabwe, and now plans a further 12 such projects. JICA Africa specialist Kazunori Oshiyama told The Africa Report that concessional loans and grant aid will “play a major role through individual projects, including cross-border roads, power development and regional power linkages”.?

 

Change needs power?

 

For the ICA’s Alex Rugamba, there is a need for more joint efforts, as much between donors as between African governments: “The regional projects present great potential for collaboration in project preparations and opportunities for joint working by donors.”

 

?If Africa’s infrastructure revolution is to maintain its newly-discovered momentum, there are still major problems to overcome. The ICA’s latest annual report, for example, laments the slow progress countries are making in setting up regional power markets. A key contributor to the vision of sharing electric power might be the development of the Inga hydro-electric dam project on the River Congo, which has the potential to generate around 40,000 MW. But here again, the ICA notes, “the development of Inga will take some considerable time as the project is fraught with political, security and institutional challenges”. More realistic are less ambitious schemes where national governments have taken a lead and are prepared to negotiate viable and reasonable terms with their neighbours. Such is the case in Ethiopia, where some 3,600 MW of additional power is already planned or even under construction, especially at its Gilgel Gibe hydro-electric projects, and where agreements to sell power to neighbouring Djibouti, Kenya and southern Sudan are considered viable.?

 

Investment in ports falls behind trade growth

 

Port capacity is lagging behind. Read more. 

Most daunting, and much less easily financed, are Africa’s desperate needs for reliable supplies of drinking water (in both urban and rural areas) and for rural roads to help open up the remotest parts of the continent to trade. There is a mountain of work still to be done.

Pumping in the Petrodollars

 

Brimming with foreign reserves, the Gulf states have been expanding their investments into North Africa – following Dubai’s lead – as part of their diversification away from oil

 

Petrodollars recycled into investments in the Maghreb and Egypt have been giving the economies of North Africa a huge boost, even if the current financing climate may now put some of the racier projects on ice. Playing to the south Mediterranean’s strength as a logistical hub for Europe, and the geographical proximity of millions of European tourists, the Gulf states have planned ports, industrial zones and massive leisure complexes. The emerging local middle class is also luring investors into North Africa’s financial markets.?

 

The Gulf Cooperation Council (GCC) states – Bahrain, Qatar, Kuwait, Oman, Saudi Arabia, and the United Arab Emirates – made some bad choices in the previous oil boom. The two energy crises of 1973 and 1979 pushed oil to levels, in today’s prices, close to $100. Suddenly coffers were overflowing and petrodollars were recycled into a generous welfare system and a large-scale public investment programme, building infrastructure and industries. When oil prices slumped, the fragile political structures characteristic of GCC states meant that rather than take the political hit to reduce welfare, it was infrastructure projects that got axed and industry suffered.?Gulf sovereign fund purchases

 

But since the mid-1990s, the GCC states have been opening up their economies, expanding their private sector and maintaining prudent fiscal policies, while expanding local stock markets. Dubai, ahead of the game, started pushing its wealth into developing property and infrastructure, creating free zones and gambling successfully on tourism and trade to take advantage of its key transport location. The Emir of Dubai, Sheikh Mohammed bin Rashid al Maktoum, rather than trying to centralise everything in a South Korean-style chaebol, created several competing entities such as Emaar, Sama Dubai, Damac and Nakheel. Able to negotiate directly with governments to win contracts, these companies have also benefited from state financing. ?

 

The vitality of these enterprises is impressive. Before 2004, Dubai Ports World (DPW) operated just four international ports. Now it employs 30,000 people in 30 countries, managing 55 port terminals. In Egypt, the company won the build, operate and transfer (BOT) contract for El Sokhna, the country’s largest privately-owned port, which sits astride the international trade route between East and West. In Algeria, DPW runs the port of Djen Djen. It also operates concessions in Djibouti and Senegal, and considers Africa a natural part of its expansion. DPW has now become the third-largest port operator in the world behind Hutchison and PSA International. The Jebel Ali Free Zone Authority, which often follows DPW’s lead, has the contract to run the free zone in Morocco’s new Tanger-Med port complex, 35km east of Tangiers.

 

Images of dubai?

 

Tanger-Med is emblematic of how things are changing in Morocco. Pushed through by a dedicated royal economic planning unit, Agence Spéciale Tanger Méditerrané, it wants to replicate Dubai’s success in becoming a logistics hub for its region, stimulating local industry by opening free trade zones next to the large deep-sea ports where giant roll-on roll-off tankers berth.

 

?There is a synergy between the Gulf states, whose oil boom has made cities sprout out of the desert, and North African countries seeking to integrate into the world economy. Seeing images of Dubai in 1990 and the Dubai that runs a quarter of the world’s port-side cranes today, it is not hard to understand how the story has inspired others.?

 

The somewhat ponderous Abu Dhabi Investment Fund (a sovereign wealth fund that manages around $640bn) is a classic portfolio investor with a broad but conservative mandate. It was joined in 2002 by the more nimble Mubadala, which was set up to invest in sectors that helped develop Abu Dhabi’s own economy. The trend is found across the GCC, as the region’s states seek to diversify away from hydrocarbons. Increasingly they act like private equity players, purchasing management stakes and seeking acquisitions that could add value.

 

?Infrastructure, energy and finance are key targets for Abu Dhabi. Sonatrach, the Algerian energy giant, has linked with Mubadala and SNC Lavalin to build a 1,200 MW power plant at Hadjeret Ennous. In 2007 Sonatrach, Dubai Aluminium Company and Mubadala combined to launch a $5bn aluminium project. Harnessing Algeria’s cheap gas to run a 2,000 MW power plant, the complex is aiming for annual production of 700,000 tonnes a year. ?

 

“These investments are often characterised by joint ventures, between sub-divisions of government holding companies in the Gulf contracting with government agencies in North Africa, working with large energy or producer companies, or setting up joint investment funds,” says Rachel Ziemba, lead analyst for oil exporting economies at US think-tank RGE Monitor. “Leveraging the skills and experience learnt at home, companies like Emaar have launched themselves first into Lebanon and Jordan, and then into North Africa, and increasingly into Sub-Saharan Africa too.” They have not been half-hearted in their spending. In 2006, Gulf investors provided 40% of Egyptian foreign direct investment.?

 

Tanger-med teamwork?

 

Horizon Tangiers Terminal, a consortium of Horizon Terminals Limited (owned by Dubai’s ENOC group), Kuwait-based IPG and Morocco’s Afriquia SMDC, won the BOT contract for a bulk fuel terminal at Tanger-Med, helping Morocco to provide cheap fuel in the western Mediterranean.?

 

The use of joint ventures has implications for any future activities, post-credit-crunch, in view of the ambitions of Morocco and others to expand south of the Sahara. Already Moroccan banks have found homes in Senegal, Gabon and Mali. An interesting evolution of this trend would be the maturation of a company like the Moroccan Agence pour l’Aménagement de la Vallée du Bouregreg (AAVB) into a property developer in its own right, raising finance locally and hoping to bid for contracts such as the rebuilding of Gabon’s waterfront boulevard. In conjunction with AAVB, Emaar is developing the Bouregreg valley into a huge tourist complex, with a marina, office space and housing. Specialists from across the globe are taking part in the planning and execution.?

 

Capital transfusion

 

?A transfusion of skills between the Gulf and North Africa is taking place, despite tensions over the importing of workers and materials, which echo criticism made of Chinese-built infrastructure projects. Despite construction being a tried and tested way of making a dent in unemployment – a problem in North Africa – the GCC companies often bring in their own workers. Locals may resent any exploitation and repatriation of profits.?

 

Algeria in particular has reacted, causing delays to Emaar’s plans for multibillion dollar investments in Algiers, and forcing the Dubai-based company to accept a smaller tract of land. Redevelopment of the Bay of Algiers, a new university campus and a technology park should however see the light of day. The oil wealth Algeria has accumulated is perhaps one reason for this coolness towards Gulf investors. While Tunisia and Morocco cannot hope to raise the financing necessary for these mega-projects, Algeria can aspire to – and therefore wants – better terms.?

 

There are now worries about the financing model being used by Gulf contractors. Dubai’s property developers tend to use a minimal amount of equity financing, relying a great deal on debt. As the global lack of appetite for risk bites, the higher cost of borrowing is going to constrain projects. Large tourism and property development projects such as the Dubai Towers hotel in Casablanca may escape more difficult times. But as a senior advisor to the Abu Dhabi Investment Fund explains: “Securing property financing has become more difficult as a result of the credit crunch. Loan-to-value ratios have become more conservative, and investors are paying more attention to cash flow coverage. Equity financing has to be available for a larger slice of the project. As a result, some speculative projects may have a hard time finding property financing.”

New look for Carthage revamp

 

Tunis bids to become a new
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?The future is a little uncertain. The domestic banking system in the GCC is reliant on external financing. Many analysts believe Dubai has borrowed too much, and the result is a real focus on problems of liquidity. The collapse of the oil price has not helped. Though Abu Dhabi may bail out Dubai, it is unclear if this will be limited to the flagship projects. ?

 

In late August, three Gulf banks said they would raise $2.8bn to create two funds to invest in infrastructure and agriculture in the region. Why, asked the chairman of Ithmaar Bank, Khalid Abdulla-Janahi, should we leave all the infrastructure deals to the Deutsche Banks and JPMorgans? That was then. At the peak of the boom, creating the Gulf’s first investment bank made sense, as it surely will again a year or two from now.

 

?The region has both the need, and means to pay for, a vast array of infrastructure, across the energy, transport, health, and tourism sectors. But for now, North Africa’s building sites may not be quite as busy.

Ghana: A surge in illegal diggers

“We have about 10,000 illegal miners in the Obuasi area,” says AngloGold Ashanti’s (AGA’s) public affairs manager in Ghana, John Owusu. They are mainly immigrants from other regions, especially the Northern, Western and Central Regions.?

 

The Obuasi mine has extensive underground sections and illegal miners take extreme risks in dangerous and cramped conditions. Some end up being crushed to death and in 2008 alone, nine bodies of illegal miners had been recovered from Obuasi by the end of September, when a combined team of the Ghana armed forces and police service began patrolling the perimeter of the site. The company says there has been a 95% reduction in thefts from the mine since then.?

 

The government’s Minerals Commission has a plan to register the gangs, known as ‘galamsey miners’, and provide them with a concession area in which to work. But there is little enthusiasm for the proposal, despite the dangerous nature of the work.?

 

“Goldfields Ghana have tried it, but it’s rather like inviting armed robbers into your house and asking them to stick to the outhouse, and steal from there,” says another AGA official, Reynolds Twumasi.?

AngoGold production Ghana

AGA’s latest annual report noted that the galamsey miners had had an adverse effect on operations at Obuasi: “These operators have threatened and assaulted our employees and contractors. Galamsey activity underground in the Adansi shaft pillar has the potential to close the shaft and put future investment in Obuasi in jeopardy. Copper theft (primarily electrical cable) has caused hundreds of thousands of dollars worth of damage and lost production.”

 

?“They work in gangs of 40-50, mainly men between the ages of 25-45,” explains Owusu. “The women and children provide back-up services like washing and cooking, and carrying the ore back for processing. They can spend weeks underground, but they set light to cables, drill and blast without recourse to safety and environmental impacts.”?

 

“Poverty is what drives them,” Owusu adds. “Lack of job opportunities, high unemployment and the loss of livelihoods as their lands are taken over or adversely impacted by AGA’s operations.”

 

?But retrenchment is a factor too. AGA has fired 5,000 legal miners in the last ten years, and the alternative livelihood programmes offered by the company are too slow, when they can make a quick $2,000 from a lucky strike.

 

?The retrenched workers use their inside knowledge to guide the syndicates into the labyrinth of the mines, which are as deep as 400 metres underground. Despite the hazards of sifting through tailings and slime dumps filled with mercury, arsenic and cyanide, and the imminent danger to life and limb, the artisanal miners see their profession as a noble one.?

 

‘Chairman’ Musah Abdulai leads 6,000 galamsey miners in Prestea, in Ghana’s Western Region. On a recent visit to Accra he explained what drives his organisation. “Say you are going to Kumasi. Is it your intention that you are going to kill yourself?” he asked. “No! You are travelling and anything can happen. That doesn’t stop people from travelling, does it? More people die from car accidents than through accidents at our mines. But they are still travelling on our roads and government agencies are working with the transport agency to make travel safe. That’s exactly what we want government to do for us. This is how we want government to help us.”?

 

Abdulai suggested that the government should support the galamsey miners “because unemployment is very high in Ghana and we are facing many problems. There are 6,000 of us; even if you have one wife and one boy, it means we support 6,000 times three people.”?

 

While the multinationals have supported mining communities with what they call Alternative Livelihood Programmes, Abdulai rejected the idea that miners should take up activities like snail or poultry farming: “Do I look like I should be engaged in snail farming? Apart from that, how much can one earn to look after my family? I have to take my child to school. It won’t help. But anyway, it’s good for some people who are not young and strong, but not for a person like me. We need to engage in activities that bring good income. Many of the people in our community don’t even eat snails.”

Nigeria: big miners stay away from Jos Plateau

 

Nigeria’s Jos Plateau, once the hub of a mining industry which fed European demand for tin through much of the 20th century, has a lot in common with post-industrial areas of the world. Unemployment has decimated a thriving working class which once supported two league football teams in a uniquely multi-ethnic city. In the surrounding countryside, abandoned mining equipment and rain-filled quarries litter a barren land, where waste dumps and gully erosion render much of the land unusable for farming.?

 

After tin prices crashed and the multinationals left, the Nigerian government allotted funds for the rehabilitation of this land, but previous state governments embezzled most of it. Subsistence agriculture, livestock, and occasional vicious fights for the scraps of state patronage are the order of the day here now. Yet the world is still supposed to be in the throes of a commodities boom, with Chinese, Indian and Russian firms as well as European and American multinationals snapping up prospects on Africa’s mineral frontiers. So why is there no evidence of that on the Jos Plateau, amid some of the world’s richest deposits of valuable cassiterite and columbite??

 

Colonial Nigeria, while never a mining giant to rival Southern Africa, produced large volumes of coal and tin as well as gold and other minerals. At its height in the 1940s, spurred by demand from Britain’s war economy, the tin ore industry produced around 17,000 tonnes each year and employed 75,000 local and migrant labourers. More than 20 mainly European companies operated on the Plateau, using equipment such as giant drag-lines whose hulks can still be seen in the mining districts of Vom and Barkin Ladi. Solid minerals proudction by state, Nigeria

 

?The tin mines’ downturn mirrors the story of the commodity decline across post-independence Africa; by the 1970s output had dropped drastically, and the entire mining sector had fallen by the wayside of an oil-centred economy. Energetic reformer Obiageli Ezekwesili, formerly Nigeria’s solid minerals minister and now World Bank vice-president for Africa, noted in 2004 that government mineral revenue had dwindled to only N81m ($692,000) by the end of the 1990s. Helped by world prices and reform efforts, it grew back to N300m ($2.5m) by 2004 – but much of that is likely to have come from large-scale quarrying and aggregates extraction for the booming construction sector (see graph).?

 

Yet Jos Plateau’s mines are not completely silent. Digging continues apace today, only in the informal sector. Illicit dry-season mines employ labour from local villages; the workings range from tiny six-foot pits to extensive and often dangerous excavations in which as many as 5,000 people are employed.

 

?In Jos town, mineral dealer James Dung sits behind a desk littered with pens, mineral samples and archaeological artefacts discovered in the workings. He is one of around 40 remaining licensed tin buyers, all small-scale, remaining in the city. Dung says the ancient belt-driven machines in the shed outside are sorting their way through the tailings of abandoned mines, with the refined output sold to Germany and the Far East. But producers admit that there is often an overlap between formal and informal production. Even in colonial times, many European tin dealers traded in ore stolen at night from competitors’ concessions; in the boom year of 1945, 10% of production vanished this way. There is a big incentive to turn a blind eye, too; tin prices more than quadrupled between 2003 and mid-2008, to $20,000 per tonne. The minerals are clearly there, then, and so are the international buyers; so something must be keeping multinational companies from engaging in the tin trade in Nigeria. ?

 

“You only have to look at the experience of companies in the oil sector,” says Rolake Akinola, Nigeria analyst at the UK’s Control Risks Group, “and add to that the regulatory uncertainties and the dearth of institutional knowledge of the mining sector, to see that any new entrants would really be diving into uncharted waters.” While she was mining minister, Ezekwesili revised the legislation, commissioned a cadastral survey and digital register of mineral reserves, increased transparency and even organised forums with villagers in potential mining areas, in order to forestall community relations disasters like those which have sparked crisis in the Niger Delta’s oil industry. Her efforts were rewarded with some interest from mining multinationals, but this seems to have died down since her departure.

 

?“Mining doesn’t seem to be at the top of the Yar’Adua government’s priorities,” says Akinola. But there’s also a more concrete infrastructural bottleneck – actually getting the product out would require huge new investment in missing infrastructure. Formerly, tin miners had the advantage of the Bauchi railway to shift their ores to world markets, but today this is in terminal disrepair and road remains the only (expensive) option for carrying bulk loads to port terminals. So for now, Nigeria’s proven reserves of 34 different commercial minerals continue to slumber beneath their hills like dormant giants or else dribble out through the informal sector. But for those willing to take the first bold step in a field virtually free from competition, the rewards could be unprecedented.

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