Nigeria/China: Satellite upsets a friendship made in heaven


After an over-enthusiastic first fling China’s commercial overtures ?to Africa’s rising economic giant are running into difficulties in many sectors


Two showpiece contracts of the Nigerian-Chinese relationship have gone spectacularly awry in the last few months but, in time, no doubt these will be put down to teething problems of a new trading partnership that has taken firm root and is beginning to blossom.


?The first bombshell came in October when the Nigerian government suspended and then terminated an $8.3bn contract with the China Railway Construction Company (CRCC) for the modernisation of Nigeria’s dilapidated North-South railway system.


?Fate then intervened on 10 November, when Nigeria’s first-ever communications satellite, NigComSat-1 – which had been launched with much fanfare by China in May 2007 at a cost of $257m – suffered a sudden solar panel failure and electrical breakdown.


Out of orbit


?Nigeria’s prestige and national pride are at stake in the satellite project and so the government of President Umaru Yar’Adua could yet be persuaded to move ahead with the planned launch of two more satellites at a cost of a further $500m. But, cautious as ever, the government has not rushed to approve the disbursing of the appropriate concessionary loan from China Exim Bank.?


The Yar’Adua administration’s wariness of taking on large debts to China is understandable given its concern that the cancelled rail project – which had been forced through by the government of ex-President Olusegun Obasanjo days before the November 2006 China-Africa Summit in Beijing – did not meet basic standards of due diligence.?


The sheer haste with which the rail contract was awarded illustrates the extent to which some Chinese firms – convinced that they had the sustained support of both governments – were ready to risk getting their fingers burned. In earlier negotiations with international finance institutions over the railway project, the IMF is said to have asked for documents the size of a New York telephone directory. But when the CRCC came in, within a fortnight it had negotiated the very same project in its entirety.?


With Nigeria’s banks rather than its government now putting out the welcome mat, the Chinese are busier than ever. Leading the way on the Nigerian side, First Bank has signed a $2.4bn joint venture with China’s Shenzhen Energy Group (CSEG) to build a 3,000 MW power plant and an agreement on a $500m free trade zone in Ogun State. First Bank also has deals with textile manufacturer Yuemei Group and China Construction Bank. Another leading Nigerian bank recently advertised for Mandarin-speaking marketeers to target more Chinese businesses.?


Tricks of the trade


?Ngozi Okonjo-Iweala, the former Nigerian finance minister now at the World Bank, thinks Nigeria can learn some tricks from Chinese businesses. She said: “China knows poverty first hand and has evolved a successful wealth-creation formula that it is willing to share with African nations, Nigeria included.”


?With over 40 companies now wholly-owned or in partnership with Nigerians, China’s business expansion in Nigeria has been spectacular. Its firms have built the multi-billion dollar Sportsmen Hostel of the National Stadium in Abuja, the Nigerian Telecommunications Commission headquarters, an important link road in Lagos and have the contract to repair the Apapa-Oshodi Expressway. China Exim Bank has been involved in financing Nigerian power stations like Omotosho and Geregu. China National Offshore Oil Company has an offshore oil production stake valued at $2.3bn.?


One of the rites of passage for foreign investors in Nigeria is having their expatriates kidnapped. After Chinese construction workers were hijacked recently in Anambra State, analyst Jegede Kayode, told The Africa Report: “The kidnapping doesn’t signify a backlash against Chinese interests; expats are generally being kidnapped daily in that region of Nigeria.” Kayode runs Afrobridge Consulting, which brokers business between Nigeria and China. “In 18 months I have doubled my staff strength both in Nigeria and in Beijing,” he said.?

 2008 headline Chinese deals

Sinoma International Engineering ?
Amount: $1.6bn MOU

?Nigeria’s Dangote Group and China’s Sinoma International
Engineering signed a $1.6bn memorandum of understanding
to install ultra-modern cement manufacturing plants to raise
Dangote’s cement output in Nigeria to 26.5m tonnes a year.
However, in December 2008, the size of the deal was cut back
to $690m, while plans to build new plants elsewhere in Africa
were also temporarily suspended.

Shenzhen Energy Group ?Amount: $2.4bn?
A $2.4bn joint venture between China’s Shenzhen Energy Group
(CSEG) and First Bank to build a 3,000 MW gas-fired power plant.
The location has not been specified.?
Guangdong Xinguang International China-Africa Investment ?
Amount: $500m?

Ogun State Free Trade Zone, a $500m agreement between First Bank
and Guangdong Xinguang International China-Africa Investment.
Chinese firms are also constructing the Lekki Free Trade Zone in
Lagos State.


One of the most high-profile Chinese entrepreneurs in Nigeria is Pamela Wu, who has fully accepted Nigeria’s ‘bring your own infrastructure’ business environment and has thrived in a difficult climate to build up Big Treat Plc, Nigeria’s largest confectionery group. She combines business with rounds of golf at the prestigious Ikeja Golf Club.


?The numbers of Chinese resident in Nigeria are a matter of conjecture, but are thought by analysts to have risen from only 6,000 in 1992 to at least 75,000 now. An official at Nigerian Immigration Services told The Africa Report: “We have heard stories of some Chinese illegals living inside their factories and never coming out, but we are on alert.” And the illegal immigration flows both ways. Guo Kun, China’s consul-general in Lagos recently said his visa section was having a tough time verifying documents because “Nigerian businessmen put forward bogus letters of invitation for business” in China.?


From pak choi ?to pullovers?


Chinese are heavily represented in the retail sector. Etudor Akpan, a manager at a Chinese restaurant in Apapa, Lagos, said: “In the last six months I have sourced workers for at least four new Chinese restaurants opening in Apapa alone. These people mean business here in Nigeria.” At Gatankowa Fairly Used Goods Market in Abule-Egba, a few kilometres outside Lagos, Chinese traders sell used textiles on the road. In the Ojota area of Lagos, there is a Chinatown market built in the traditional Chinese style; it was shut down last year because Nigerian custom officials alleged that the Chinese were smuggling goods into the country, but this was resolved amicably and more such sites are planned across the country.


?At a factory in the Adeniyi-Jones area of Ikeja industrial estate in Lagos, a Chinese manufacturing firm, Amigo Hair Attachment Products, was found to have employed hundreds of Nigerian under-age children in a new sweatshop labour racket. And the Nigerian National Agency for Food and Drug Administration Control recently sealed up a Chinese dairy company in Lagos which had imported the unsafe baby milk that had killed babies in China.

Hard falls for soft beans in Uganda


Uganda’s coffee sector, whose leaders launched a campaign two years ago to arrest a decade-long fluctuation in production, faces yet another test – the ripple effects of the global financial crisis. The price of coffee fell by 30% in the last five months of 2008, with a tonne trading at $1,700 in December. The fall hit farmers hard, coming in a season when Uganda, Africa’s second biggest coffee grower after Ethiopia, registered a 34.1% rise in the volume shipped out.?


Some coffee farmers, like Hassan Kakooza from Masaka, a district on the shores of Lake Victoria, have responded by holding on to their coffee in anticipation of better fortunes early this year. “As of now, I am on standby,” he told The Africa Report.?


Analysts at the Uganda Coffee Development Authority (UCDA) expect the price to fall further before it picks up, in part because the volume of coffee continues to rise. “Some farmers tried to hold on to their coffee,” said UCDA information manager David Kiwanuka, “but prices have continued to go down.”


?“Two years ago we initiated a coffee-production campaign aiming at reviving coffee production to 270,000 tonnes by the year 2015,” said Fred Luzinda Mukasa, UCDA’s head of finance. Production dropped to an all-time low of 120,000 tonnes in 2005/06, but totalled 192,640 tonnes in 2007/08 thanks to the campaign, which focused on research to produce disease- and drought-resistant varieties, easing access to inputs and credit facilities, and mobilising farmers into groups to reduce the number of middlemen.


Back to Commodities, Wobbles in the Supercycle

Commodities: Wobbles in the supercycle

All commodities pricesThe recent drops in commodity prices worry African producers, but the downturn is not the end of the supercycle, just the end of its first phase



Eastern DRC: Back to the battleground


General Laurent Nkunda’s armed challenge to the Congolese authorities stokes ethnic hatred in a highly sensitive border area, with valuable natural resources also at stake


The recent fighting in the eastern Congo, which re-started last July and soon began to reach disastrous proportions, seems like a hideous afterthought. Over 2,000 people have been killed and 250,000 displaced, half of whom have been cut off from outside help.


?Things had seemed to be going fairly well in putting the Democratic Republic of Congo (DRC) back together. Following the years of civil and foreign wars between 1996 and 2003, peace had finally been achieved and, after navigating the dangers of a complex transition between 2003 and 2006, most of the fighting groups had been disarmed before the elections of July 2006.?Eastern Congo: key dates


If the eastern Congo has refused to heal, this can be attributed in part to causes that predate the last war. The two eastern provinces of the former Zaire, now the DRC, have a large, ethnically Rwandan population. But like the Volksdeutsch in pre-World War II Central Europe, they have been both an economic asset and a political headache. As a result of events in the first post-colonial civil war (1960-1965), the ethnic Rwandans in the east were, rightly or wrongly, perceived as supporters of the Zairean dictator Mobutu Sese Seko. This did not endear them to the eastern Congolese who were generally hostile to the dictator.?


Heroes become suspects


?Mobutu’s fall in 1997 put the DRC’s Rwandans in the ambiguous position of being both heroes (they had collaborated with Rwanda in overthrowing the dictatorship) and traitors (this collaboration, although beneficial, had put them in the role of agents of a foreign state with which they shared the same ethnic origins). In addition, the idea of Rwanda had become an ambiguous proposition: it was both the horrific image of the genocide now associated with the Hutu population, and the angelic and progressive identity brandished by the Tutsi victors.


?By 1998, the images had flipped over for the rest of the DRC: the Tutsi ‘liberators’ from Kigali had tried to colonise the country they had previously ‘liberated’ and, in trying to defend itself against them, the Congolese government had entered into an unspoken and unholy alliance with the former génocidaires. Both sides found ready-made allies among local ethnic groups. It was between 1998 and 2002 that General Laurent Nkunda gained his first notoriety as an anti-government rebel allied with Rwanda. ?


The 2006 elections were supposed to put an end to all this, but they did not. The former Tutsi rebels found it difficult to integrate into the new ‘national’ army while the former Hutu ‘allies’ went on with their anti-Kigali campaign, hoping that with some of their friends now in positions of power in DRC, they could take their fight into Rwanda itself. ?


Exploiting DRC’s weakness?


Nkunda, for his part, was incensed that some of his non-Tutsi former comrades-in-arms now had good positions in the new ‘national’ army while the International Criminal Court (ICC) threatened him with action for some of the atrocities committed when he was still a rebel. ?


To these issues, more have been added over recent months. The government of President Joseph Kabila has begun to look increasingly stagnant and rudderless. After the resignation of his octogenarian prime minister, Antoine Gizenga, the long delay in putting a new cabinet together indicated weakness and indecision. ?


And, even if Rwanda’s President Paul Kagame has been trying to turn a new leaf and drive his tiny country into the unlikely role of a new development hub and high-tech beacon for East Africa, some of his close associates thought it a mistake to abandon the mining wealth of the DRC from which they had richly benefited during the war. This gave General Nkunda a role to play in Rwanda’s quasi-colonial control over the hundreds of artisanal mines scattered across eastern DRC.


?Congolese Tutsi businessmen began to finance Nkunda’s re-armament with the discreet support of Kigali, while demobilised Rwandan army soldiers were encouraged to cross the border and help their Congolese cousins, the indirect nature of the help enabling Kigali to create conditions of plausible denial. Given the continuing guilt felt by the international community for not having helped the Rwandan Tutsis in their hour of need in 1994, Nkunda and his backers had an implicit window of opportunity. All the more so since several of the Africanists close to Barack Obama are old Africa hands from the Bill Clinton administration and who came into office shortly after the genocide. As a result, they are very pro-Kigali. Susan Rice’s nomination as US ambassador to the UN was very good news indeed for Kagame. ?


Countries that were former combatants in the Congo war are watching the situation closely. Angola has a small military mission in North Kivu, keeping Luanda abreast of the latest developments. South Africa, as the DRC’s peace broker and one of its main future mining partners, is also watching closely.


Rifts in the rebellion


?Things have not deteriorated to the level of the 1998 implosion. The DRC now has a democratically-elected government, its army is perhaps a disaster but it is at least not rebellious. Its economy, although unhealthy, is slowly on the mend, and the UN, which was practically on the run ten years ago after its Rwandan debacle, now has a serious force of 17,000 men in the country. ?


However, the situation in eastern Congo became all the more complex in early January when one of General Nkunda’s rivals – and an ICC indictee – Bosco Ntaganda claimed to have deposed Nkunda from the leadership of the Congrès National pour la Défense du Peuple, signalling rifts in the rebel group that will affect the prospects for peace in the region. ?


The situation is volatile. Even if General Nkunda is unlikely to march his men across the country to Kinshasa as his Rwandan mentor James Kabarebe did in 1997, he could be trying to carve out a kind of Kigali-sponsored ‘vice-royalty’ in the Kivu provinces. Its unacknowledged aim would be to bring the eastern Congo’s mining resources under indirect Rwandan control, a dangerous game that could rekindle the embers of ethnic hatreds in the area and stoke the fires of further conflicts in the future.

Petina Gappah: The shoes on her feet


Petina GappahI spent three weeks in Zimbabwe recently and saw at first hand what the imploding economy has done to the lives of the very poor. The stories are heartbreaking: the Glen View man who lost all four children to cholera, the Kambuzuma widow who died from the stress of burying four close relatives in succeeding weeks, but it was the story of how an old woman from Marondera came to lose her shoes that said more than any other about what my country has become.?


In Dombotombo, a high-density township in Marondera, some 70km from Harare, was an old woman who was a walking, talking, living cliché: poor, old, the only carer of the orphaned grandchildren for whom she worked hard, too hard. On this particular day, she rose at dawn as she did on every day of her life, except Sunday, when she got up a little later to go to church. She got dressed to go to work in her field. The shoes she put on were not the good pair she wore to church, but an old pair, an everyday pair for field work. These shoes were once bright red with small white stars, but the red had faded, the stars were brown and the eyelets to thread the shoelaces had long since fallen off.


??She picked up her hoe and headed for the huge plot of land beyond Rudhaka Stadium. She and her neighbours had turned this empty land into abundant fields of crops. Such fields are an increasingly common feature of Zimbabwe’s townships; where there is an empty piece of land, people ignore the by-laws and plant crops. As she turned into a little copse of bushes, she collapsed and did not get up again. Her hoe fell to the ground. Maybe it was a heart attack, maybe a stroke, no one will ever know, because there will be no autopsy.?


Two hours later, two men, also on their way to the fields, spotted her huddled body. Inhibited by a profound respect for dead bodies, and by the fear that is an ingrained part of Shona culture, they avoided going too close to her. Back in the township, they made a report at the police station. The police did nothing beyond taking down the men’s addresses.??


Her grandchildren, meanwhile, had risen and cleaned the house. They did not go to school; there are no teachers. There is no electricity, either, so the oldest grandchild cooked on a three-stone fire outside the house. They waited for their grandmother to return. Hungry – eating only twice a day, this midday meal was their first – they finally ate. They set aside their grandmother’s share in a covered plate. Two o’clock came but not their grandmother. The eldest child went to the fields but did not see her. Four o’clock came with no grandmother. In the early evening, the children went to the police. A policeman who was on duty earlier that day decided to follow up on the earlier report, went to the address provided by one of the men and was led to the old woman’s body. ?


They found her in the same place, ten hours after she fell, only, there were two changes to the scene. The hoe that earlier fell to her side was now missing. And the hands of an unknown stranger had removed her old, worn shoes from her feet.

Rough and tumble amid the cocoa boom


Rough and tumble amid the cocoa boomFirst the good news for Africa’s two biggest cocoa producers, Côte d’Ivoire and Ghana: world cocoa prices hit a 20-year high at the beginning of 2009, and medium-term forecasts reckon the cocoa price could rise to $3,000 a tonne. Then, the bad news: although demand for chocolate and other cocoa products is rising, the main reason for the price leap is the shortage of supply from West African producers.?


West Africa would have benefited much more from the current cocoa boom if Ghana’s cocoa farms had been in better condition and the banks had lent money to the farmers to improve the crop. It would have helped also if the politics of Côte d’Ivoire, still the world’s biggest cocoa producer, had been less divisive and violent and its ruling elite had not seized control of the national cocoa market.?


Ghana’s democratic elections have won rounds of international plaudits, and its cocoa production is increasing. The national target is a million tonnes a year by 2010.?


After the years of military rule and civil war in Côte d’Ivoire, President Laurent Gbagbo is defying the doubters. Due to have faced re-election in 2005, Gbagbo has presided over a succession of postponements since then – to which his political opponents, Alassane Ouattara and Henri Konan Bédié, have registered only feeble protests. Now Gbagbo’s party is putting up large green billboards announcing: “Towards peace, towards elections, quickly… quickly”. The voters are unconvinced. “Ah, he’ll never hold an election until he knows he’ll win it,” complained Kone, an Abidjan taxi driver.


Back to Ghana, The harsh realities after the closest vote 

Interview: John Evans Atta Mills, President of Ghana


The Africa Report: What does the National Democratic Congress stand for today?


?President John Atta Mills: We are all social democrats, and we believe it is the responsibility of the state to provide for the marginalised and that selfless service to the people should be our immediate objective.?


What role should former President Jerry Rawlings play in the NDC??


He is with us. There is really no problem. If there is any argument – and of course it’s fuelled by our opponents – it’s in respect to what role President Rawlings should play in our party. That is an internal matter; we have to decide how to tap his obvious strengths. They should not tell us what role President Rawlings should play.?


You have promised a cut in fuel tax for everyone, rich and poor – would it be better to target assistance??


People are suffering; we can make it up with better tax collection. You go to the police and they will tell you how many people are evading customs duties, the number of people who are getting exemptions from tax.?


What are your policies for promoting economic growth?


?Agriculture will be our absolute number one priority, to make sure our dams are working, our irrigation plans are in place. We have to make sure that rice will be one of the crash projects, maize another and vegetables another. We have to encourage local industry, like poultry – it’s collapsed because we are allowing cheap imports.


?How would you fight corruption?


?You have to give protection to those who initiate the crusade against corruption. You have to give them political support.?


Is drug money getting into the political system??


Yes, clearly it is. I made a statement that I’m not going to allow drug barons to take over this country. It’s getting into our political system. I think you must lead by example. You must not only bark, you must bite, and you must let the law take its course. Just stamp out the trade. We have to do it.


Back to Ghana, The harsh realities after the closest vote

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