A F R I K A S O U R C E S

Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [Senior analyst]The content of this publication is based on a selection of information browsed by our services. Request for a more detailed analysis at payet@in.com – © Afrikasources Consult Ltd – Port-Louis [Mauritius] 1

COMESA RISKS ASSESSMENT BULLETIN

Eight opposition parties in Burundi have demanded a repeat of communal elections, held on 24 May, claiming the ruling party - which won a landslide victory - was involved in massive fraud and poll-rigging.Figures published by the National Independent Electoral Commission showed a large victory [64 %] for the Conseil national pour la defence de la démocratie-Forces de defence de la démocratie (CNDD–FDD). In a statement issued on 26 May, a Belgian observer mission from the Association of Western Parliamentarians for Africa (AWEPA) made a positive assessment of the poll. Jean Marie-Vianney Kavumbagu, chairman of COSOME - Coalition of Civil Society Organizations for the Monitoring of Elections - also said despite some irregularities, the vote was free and transparent. European Union observers confirmed the local-level vote met international standards.Nevertheless, on the 1st June, the ongoing presidential election process was thrown into chaos when five main opposition contenders pulled out of the race.

A monthly publication Issue no 26 - JUNE 2010

Elections

President of Comoros Sambi's mandate expired on May 26 after the Constitutional Court annulled a law extending his term. The court's decision followed weeks of heightened political tension on the coup-prone islands. Negotiations between Comoros' leader and opposition parties on a date for presidential elections have since stalled with President Mohamed Abdallah Sambi's rivals accusing him of illegally clinging on to power.Under the constitution, the presidency rotates among the three islands of Grande Comore, Anjouan and Moheli. Many on the opposition-stronghold of Moheli, which is next to take over the presidency, feel Sambi's manoeuvrings are an attempt to rob them of the top political post.African Union send Franceso Madeira as a special envoy to try to reach a deal but in a televised address to the nation, Sambi said the talks had failed and formed an interim government made up of his old administration and a handful of representatives allied to the governor of Anjouan.

Russian Navy to Use Djibouti Port for Safety Convoys Russian warships will use the port of Djibouti while patrolling the Aden Gulf to protect the cargo ships from the pirate attacks, announced the Russian Navy. "The government of Djibouti and the country's Navy command allowed our ships to enter the port for replenishing the supplies and crews recreation," the Navy representative said.The first Russian ship which has already exploited this opportunity was anti-submarine cruiser Marshal Shaposhnikov that visited Djibouti on May 16-17. However, Russia is not going to set up a naval base in this tiny African country, the spokesman of the Russian Main Navy Headquarters told Itar-Tass news agency.Russia is joining France, USA, Germany, and Japan who are all using Djibouti as a base in their fight against piracy in the Horn of Africa.Source: http://english.ruvr.ru/2010/05/19/8121390.html

After 10 years of fruitless talks under the aegis of the Nile River Basin initiative, four African states – Ethiopia, Rwanda, Uganda and Tanzania – brushed aside opposition from Egypt and Sudan and signed a new water management agreement. Kenya, Burundi and the Democratic Republic of Congo due to sign the agreement at a later date. This is aimed at lifting Egypt’s rights to veto upstream projects and setting up a permanent commission to oversee more equitable use of the river.Egypt, which depends on the Nile for almost all of its water and regards the river as a national security issue, has questioned the legality of the new agreement. Nabil Abdel-Fatah, researcher at Al-Ahram Center for Political and Strategic Studies criticized the official approach, saying that the Egyptian response to Nile issue has been “slow and lacking in dynamism”. He added: “The Egyptian political and diplomatic structure still perceives Africa from a position of superiority; they still see it as the old Africa just after colonialism”.Indeed, this confrontation appeared as a wake-up call for Egypt to change its policy regarding Africa.

Presidential crisis

Russian Base

Nile Water tensions

A F R I K A S O U R C E S

Edited by AFRIKASOURCES – Author: Jean Philippe PAYET [Senior analyst]The content of this publication is based on a selection of information browsed by our services. Request for a more detailed analysis at payet@in.com – © Afrikasources Consult Ltd – Port-Louis [Mauritius] 2

Main party EPRDF chairman Prime Minister Meles Zenawi called the results the will of the electorate that has recognised the ruling party’s achievements over the past few years. Two opposition elite groups have rejected the results and called for a fresh vote as soon as possible.Indeed, European Union and U.S. came out quickly, albeit quietly, to contradict Zenawi’s self-congratulatory victory speech. While both noted that elections were largely peaceful and free of violence, they did not meet “international standards”.Meles' regime faces a strong Medrek challenge in the southern Oromiya region, a rebellion in the Somali ethnic region of Ogaden and even unprecedented opposition in its own historical fiefdom of Tigray. Foreign criticism of the regime's authoritarianism has been muted, notably because Meles Zenawi-- whose country borders Eritrea and Somalia -- remains a key US and Western ally in the fight against Islamic extremism.

Thomas Chiramba, the Chief, Freshwater Ecosystems Unit in the Division of Environmental Policy Implementation at the United Nations Environmental Programme affirms that the water crisis facing the country and specifically Nairobi and its environs is manageable.John Akoten a former Executive Director with Institute of Policy Analysis and Research (IPAR) argues that to meet the water needs of the population and industries, it is imperative for the stakeholders to facilitate construction of more dams in addition to having several waterways that can collect rainwater and drain it into the dams.Much of Kenya faced in 2009 what has been called the deepest drought in living memory. In 2010, water levels in important rivers dropped, forcing the Kenya Electricity Generating Co. to reduce hydropower production. Nairobi endured inflated water prices, intermittent blackouts and electricity rationing. Crops failed throughout the country, even in the breadbasket region between Nairobi and Lake Victoria.

Water crisis

Following large victory in elections, Prime Minister Navin Ramgoolam formed new government composed of 16 ministers from his ruling Labor Party, six ministers of the Mauritius Socialist Movement (MSM), two ministers from the PMSD and one minister from the Rodrigues Island party.Pravind Jugnauth, leader of the MSM, has be appointed deputy prime minister and finance minister of the new government, succeeding to the controversed Rama Sithanen. The Prime Minister himself decided to hold the portfolio of Defence, Home Affairs and External Communications, while the portfolio of Foreign Affairs was reallocated to Arvin Boolell.The new Government is facing many challenges as the euro zone crisis could slow Mauritius' economic growth in 2010. The Prime minister has decided to create a Joint Working Crisis Committee (JWCC) between the Ministry of Finance, the Joint Economic Council, which represents the private sector and the Bank of Mauritius. He should work on the way to create a Currency Equalization Fund (CEF).

Activists lobbying for democratic reform in Swaziland have vowed to push ahead with their campaign, even though several of them were temporarily detained for blocking five border posts between South Africa and Swaziland. The protest was planned to coincide with the date on which King Sobhuza, father of the current Swazi monarch, Mswati, declared a state of emergency in the country 33 years ago. Under the state of the emergency, Sobhuza banned all political parties, introduced 60-day detention without trial, outlawed marches and demonstrations - and scrapped the constitution.Tensions increased when on May Day, Sipho Jele – who as well as being an opposition PUDEMO activist, was a member of the Swaziland Agricultural and Plantations Workers Union (SAPWU)- was arrested for wearing a political t-shirt. Three days later, Sipho’s family were told that he was 'found' hanged in his cell but it is believed he was killed in custody.The Southern African Catholic Bishops' Conference has since asked President Jacob Zuma to intervene in the ongoing Swaziland's "political crisis".

Zimbabwe, which has arrears of $1.2 billion to the International Monetary Fund, African Development Bank and World Bank, is struggling to attract foreign investment and aid. The coalition government, led by President Robert Mugabe and Prime Minister Morgan Tsvangirai, has been locked in disputes since its inception in February 2009. Investors are also being deterred by laws requiring foreign businesses to sell stakes to locals.Zimbabwe is working towards meeting requirements set by the IMF and World Bank to qualify as a Heavily Indebted Poor Country, with the aim of having its debt cancelled. Zimbabwe’s economic growth will probably reach 2.2% in 2010, far from the 7% claimed by the Government. Indeed, investors are skeptical as the government’s Indigenization and Empowerment Act requires foreign businesses to sell 51 percent of their shares to black Zimbabweans over the next five years.In its annual review of Zimbabwe's economy, the International Monetary Fund said there were signs economic and humanitarian conditions were improving after a decade of steep economic decline and hyperinflation.

Same new Government

Sipho death questioned

Urgent need of money

A contested victory

A F R I K A S O U R C E S

Afrikasources advises on strategic risk management in Africa 3

QuoteNile Water Conflict - “The Egyptian political and diplomatic structure still looks at Africa from a position of superiority, they still see it as the old Africa just after colonialism. Egypt must stop perceiving Africa in such a regressive way and our dealings with Africa should be revised on a more equitable and developmental level” - Nabil Abdel-Fattah, researcher at Al-Ahram Center for Political and Strategic Studies

Natural hazards alertsDRCongo - 17 May 2010. Landslides caused by a volcanic eruption kills at least a dozen people and leaves at least 36 other missing on Mount ELGON, in North Kivu.

Uganda. 15 May 2010. Landslides in Uganda kill 8 people and leave 1,500 homeless, having destroyed a number of properties. The landslides in Mbale, Sironko, Tororo, Kabale and Kanungu were caused by torrential rain.

Kenya. 10 May 2010. Local news sources report that families have ignored a government order to move from their homes as landslides continue in parts of Central Province. The previous week, 34 families were evacuated from their homes after a landslide destroyed several homes in Mathira East district, Central Province. Two people were killed as a result of the landslide in Mathira East.

The Natural Disaster Risk Index (NDRI), released by Maplecroft, ranks 229 countries according to the human impact of natural disasters in terms of deaths per annum and per million of population, plus the frequency of events as well as the likelihood of earthquakes, volcanic eruptions, tsunamis, storms, flooding, droughts, landslides, extreme temperatures and epidemics. Asia accounts for most of the disaster-related deaths since 1980.Bangladesh, Indonesia, Iran and Pakistan top a new ranking of countries at “extreme risk” of experiencing natural disasters compiled by a global risk assessment company.African countries at extreme risk are Ethiopia, Sudan and Mozambique, with 95 percent of casualties due to drought. Since 1980 drought has caused 9,800 deaths in Ethiopia, 5,300 in Sudan (ranked 5th) and over 3,400 in Mozambique (9th).

Maplecroft Legal and Regulatory Environment Atlas 2010The Legal and Regulatory Environment Atlas 2010 has been developed by Maplecroft to enable organisations to identify and monitor a range of risks in 172 countries arising from a lack of respect for the rule of law, respect for property rights, insufficient access to remedy through legal systems, corruption, corporate governance, the regulatory framework and supply chain complicity risk.http://www.maplecroft.com/about/news/lre.html

The Earth Observatoryʼs mission is to share with the public the images, stories, and discoveries about climate and the environment that emerge from NASA research, including its satellite missions, in-the-field research, and climate models.http://earthobservatory.nasa.gov/NaturalHazards/

AFRIKASOURCESAFRIKASOURCES CONSULT Ltd is a multiservice development consulting firm that provides tailor-made expertise and services to governments, international organizations, private companies and projects managers... We offer independent expert advices and practical support services in the effective implementation of development strategy, helping our clients identify best value, manage risk, and realise higher levels of success from their programme and initiatives.Our capabilities are grouped into the following areas, which run horizontally throughout our market sectors:

• Consulting - Advising clients on the practical implementation of development strategy from the earliest stages of project lifecycles. • Managed Solutions - Providing teams of experienced, specialist practitioners to manage and implement client project.• Monitoring and evaluation, planning at regional, national and local level, logical framework analysis, training and workshop facilitation, project management • Lobbying, “spin doctor”, “image building”

Jean Philippe PAYETis Advisor in Investment Strategy, Sustainable development pol ic ies and St ra tegic Risk management.He has worked on investment strategies and strategic risk evaluation in La Reunion and Africa for the last 10 years.He’s been involved in various projects in India, China, Zambia, Djibouti, Egypt, Senegal and has worked for COMESA.He’s based in Cairo [EGYPT].

Chinese investments deepens in AfricaA recent oil deal in Nigeria suggests that China is set to continue investing in Africa in a bid to ensure a secure supply of resources to fuel its fast-growing economy. On 13 May 2010, China State Construction Engineering Corporation (CSCEC) and Nigeria's state-run oil firm NNPC signed a deal worth $23bn that will see the Chinese company build three oil refineries and a petrochemicals complex. The project will add 750,000 barrels per day (b/d) of extra refining capacity, well in excess of the domestic demand of 450,000 b/d that is expected when the project is finished in five years time. The Chinese decision to focus its attention upstream in the production process

reflects the Nigerian government's requirement that foreign companies must invest in developing the country's infrastructure before they can benefit from its oil and gas exports. The fact that China is willing to expose itself to the risks of investing in Africa demonstrates the lengths that the Chinese authorities will go to to ensure access to oil supplies. Energy security is a growing concern for China given the significant amount of energy that will be required for it to continue on its current development path. Meanwhile, a Chinese deal in the Democratic Republic of the Congo has been hit by charges of corruption. The $9bn deal was signed in 2008 with China agreeing to fund copper and cobalt mines, 4,000km of roads and railways and new schools, hospitals and clinics in return for 6.8 million tonnes of copper and 620,000 tonnes of cobalt over 25 years. The deal is under investigation by a commission set up by the National Assembly of DR Congo regarding the alleged disappearance of a $23 million signing bonus that the Chinese were due to have paid Gecamines, the local partner in the project.The DRC deal, along with a number of other Chinese investments in Africa, has been the subject of criticism, with claims that China is only interested in exploiting Africa's natural resources to fuel its rapidly expanding economy with little regard for African development. China has retorted that such criticism comes from Western nations that fear China's economic growth and that, by investing in Africa, China is contributing to development there. These deals are examples of the growing integration between China and Africa. With such integration comes an increased exposure to risk factors in the partner country, such as economic contagion and political instability. In particular, China has left itself open to the consequences of the unstable and insecure nature of many African states. Between 2006 and 2008, Chinese exports to Africa increased from $26.7 billion to $49.8 billion, according to a report to be released this week by Chatham House, a London-based policy group. And Chinese imports during the same period more than doubled, from $28.8 billion to $56.8 billion.

See “Investment in Africa: All to Play For” - CHATAM HOUSE [2010]Source: http://maplecroft.com/portfolio/ethical_insight/articles/23940/