"White House please, operator"


The voices of the continent unite in their welcome for the new president of the United States, tinged with realism


Power came to Nyangoma-Kogelo, Barack Obama’s grandmother’s village, within hours of her grandson’s victory speech. The Kenya Power and Lighting truck, with its men and their cables and electricity posts, were busy connecting the little village to the national grid as the crowds gathered and exulted at Mama Sarah’s front door – a prospect that, if at all it had been envisaged, had never been realistically expected during Mama Sarah’s lifetime.


?Other strange things happened during that historic week in November: a battalion of Caterpillar earthmovers and tipper trucks graded the nine kilometer road leading to the house in four days, a record. There was talk that piped water would soon be installed and that the airport in Kisumu was going to be upgraded to international status. In those heady days of November 2008, in completely unprecedented fashion, the government was actually delivering ‘development’ to a people marginalized since independence. So hurriedly that it barely had time to examine the political implications. It seemed that a new era was dawning in which the new stature of Kogelo would accelerate progress. ?


Certainly there will be parts of the African continent where Obama’s election will herald fast, concrete and visible changes, like Kogelo. More subtle and substantial changes could also be on the way for Africa – particularly in areas affected by the political spillover from a Middle East brought to boiling point by the previous administration. A more engaged US State Department, until now overshadowed by the Department of Defense, will also help unwind some of the more tangled US deployments in Mali and Algeria.

Messages for the new
President Obama

Mustapha Khalfi
Moroccan journalist

Abdirahman Abdishakur Warsame
Somalian politician
Pokuaa Busumru-Banson
South African student

Donu Kogbara
Nigerian consultant


Losing its shine?


But a sense of realism has gradually set in. For many people in his ancestral Nyanza Province and beyond, the disenchantment with the performance of the Kenyan coalition government has dampened Obama-mania. Almost a year into the coalition government, all that the Kenyan public has experienced is a rise in the cost of living and an increasingly draconian state. There is now less a feeling that the world will change as a result of Obama’s victory than there is one of pride that ‘one of their own’ sits on top of the world.


?“I don’t think people are expecting much to change,” says Steve Sande, a Kisumu resident and a youth activist. “People here are very proud that one of our own is in the White House, but nobody is thinking that doors are suddenly going to open as a result. Obama will have a lot on his plate, including sorting out the mess in Gaza. He will have very little time to turn his attention to us.”?


Poverty and possibilities


?Nyanza Province in western Kenya, from where Obama’s father hailed, remains one of the most neglected parts of the country, with one of the highest levels of poverty in the country. Having produced a disproportionate share of Kenya’s dissidents during the eras of Jomo Kenyatta, Daniel arap Moi and Mwai Kibaki, it was ‘denied’ development by successive Kenyan governments. ?


Will a US economy in trouble have the political capital available to extend programmes like the African Growth and Opportunity Act? Can it deepen its trade links with the continent beyond oil imports, potentially at the expense of American jobs? Will the new president have much time to spare for the rest of the world, given the huge clear-up job he has been handed at home??


Ultimately the most important news may be a change of tone from the US and the importance of the president as a symbol. Children growing up today in Asia, the US, Europe and Africa will see a black man running the most powerful country in the world. Old prejudice will melt, self-confidence will be released – two powerful gifts to take forward. ?


As one text message doing the rounds across Nigeria had it: “Rosa Parks sat so that Martin Luther King could march, Martin Luther King marched so that Obama could run and Obama ran so that our children could fly.”


A fractured nation


Those who fled the bloody reign of Sékou Touré have been kept at arm’s length, though a thaw may begin to bring them home to help Guinea’s development

Read more... 

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.


Africa’s vulnerability in the crisis

Kwesi Botchwey

The global economic crisis could not be happening at a worse time for Africa, says Kwesi Botchwey...

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'Polokwane spring' gives the left a lift


Almost two decades after the fall of the Berlin wall, the Communist Party are back in business. Forget Volga sedans and vodka rations – that’s for the historical materialists. Marxist-Leninism South African style is a little hipper than that. It also should be said that South Africa’s communists are a tad more idealistic than were the fading Stalinists of the Soviet order.?


This time the Communists have pinned their colours to the mast of the ANC’s Jacob Zuma, a man not known for left-wing or trade union sympathies. In fact, Zuma earned his spurs in the ANC as a ruthless intelligence chief rooting out dissidents and ultra-leftists.?


The ANC’s leftist allies now refer to the period after Jacob Zuma’s election as ANC president as the ‘Polokwane Spring’ which they say will usher in the ‘national democratic revolution’. “We are at the crossroads in the history of our revolution” said SACP secretary general Blade Ndzimande. There is “the potential for the movement to make a significant leftward shift”, he added. Cosatu chief Zwelinzima Vavi agreed: “The change of direction in policy is now urgent.” Whether Zuma can deliver that change is another matter. As Nzimande and Vavi roar into Zuma’s left ear, corporate South Africa is whispering into his right. Bobby Godsell, executive chairman of Eskom and former CEO of AngloGold, said the financial crisis is an opportunity for emerging markets, with their growing middle classes and development potential.?


Godsell said the post-Mbeki ANC is showing a new openness about engaging in dialogue with business and civil society groups on how best to address South Africa’s development challenges of crime, health, education and job creation.


For now, it will be President Kgalema Motlanthe running South Africa’s ‘national democratic revolution’, and his steadiness and political acumen have impressed so much that some have demanded that he stay as national president while Zuma keeps the party presidency. But both men face the same charge of ‘talking left and acting right’.?


Motlanthe’s choice of cabinet ministers matched skills to the relevant portfolios. The minerals and energy portfolios may be separated and there may be some radical changes as the ANC seeks to assert control over the country’s resources. SACP spokesman Malesela Maleka is said to be keen on overseeing the creation of a state mining company – that at least will be music to the ears of the comrades.


Back to South Africa, The death of unity


New look for Carthage revamp


The latest projects in Tunis specialise in being creative. Their ingenuity lies in the manner in which they have been woven into a pre-existing urbanisation project begun in the 1990s, around a reclaimed lagoon near the seafront in Tunisia’s capital city.


?Located between the airport and the city centre, the ‘Berges du Lac’ is fast becoming a vital business district, and it provides its own affluent suburbs. The ‘Sports City’ of the Bukhatir Group, and the ‘Century City’ of Sama Dubai (see model on previous page) are both centred around the lakeside, and these are also planned to form a complex of offices, housing and leisure sites.?


Beyond the ‘dawn of a new Mediterranean’ hype, the development should anchor Tunis as a financial hub to rival the growing power of Casablanca and its stock exchange, and capitalise on Tunisia’s long-established track record in tourism. With the ‘baby boom’ generation beginning to reach retirement in Europe, there are plenty who will be wanting some winter sun, and the location could even be taken up by those who specialise in providing ‘surgery safaris’.


Back to Pumping in the Petrodollars


Investment in ports falls behind trade growth


Although huge developments have been taking place in North Africa and to a certain extent in South Africa, Sub-Saharan Africa’s (SSA’s) port capacity has been lagging, both in investment and in making essential management changes. The evidence shows that while SSA’s container and general cargo traffic has more than doubled since the mid-1990s, the region has not seen a corresponding development of its port infrastructure, except in a handful of countries.


A study recently undertaken by UK-based Ocean Shipping Consultants for the World Bank provides a comprehensive insight into the status of both primary and secondary ports in SSA and a platform from which to implement positive industry change. “The study is a valuable step in digging down to Sub-Saharan Africa’s real needs in this sector,” says Andrew Penfold, Ocean Shipping Consultants’ director.?


Focusing on 17 countries and over 70 maritime ports, the study measures traffic growth, infrastructure development and institutional arrangements. The most striking factor is the strong growth that has been achieved in both container and general cargo traffic. In both categories and across all regions, traffic easily more than doubled in the period of 1995-2005.?


As regards infrastructure development, relatively few major new port development projects were identified. Several projects were at the proposal or planning stage, but a number of them had not moved beyond this point for quite some time. On the positive side, seven countries were undertaking new national port master plans as a preliminary step to delivering new port capacity.


?Institutional reform was also found to be slow. Only two countries have adopted the modern ‘landlord port model’, a major feature of which is the withdrawal of the public sector from front-line cargo handling operations. Out of the 17 countries analysed, eight retain the old-style ‘service port model’, where the public sector is both manager and operator.


?As with the urgent need for more infrastructure works, the pace of institutional reform needs to be accelerated and to be coordinated with road, rail and other major infrastructure works. This will particularly facilitate the development of the transport corridors designed to meet the needs of landlocked countries. 


Back to Infrastructure, Sustaining the momentum for modernisation

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