The Panama Papers’ growing impact on Africa

Panama papers
While no African official has yet resigned as a result of the Panama Papers, African journalists involved in the investigation say they have given Africans a wake up call and could even lead to government action.
The twin sister of DRC’s leader Joseph Kabila, the nephew of South Africa’s President Jacob Zuma and business people allegedly linked to Zimbabwe’s President Robert Mugabe are all named in the Panama Papers.  The Mossack Fonseca leak – the biggest data leak ever – have revealed the names and alleged financial affairs of top officials from at least 15 different sub-Saharan African countries or people linked to them have been named.
While the practice of keeping money abroad is not illegal, the revelations by the International Consortium of Investigative Journalists’ (ICIJ) team of about 400 journalists have made global headlines. African Union chairwoman Nkosazana Dlamini-Zuma said the African money kept in foreign banks should be repatriated to the continent.
At a conference last year, former South African president Thabo Mbeki noted that a report commissioned by the AU had found that Africa was losing $50 billion(43 billion euros) a year through illicit cash flows – money that could go into education, health care or investments on the continent. A report by the Organisation for Economic Co-operation and Development (OECD) even puts the amount at $150 billion.
Several African governments have either remained silent or maintained that the officials were acting within their legal rights when confronted with the disclosure. African journalists who worked on the investigation believe that the Panama Papers will have a strong impact:

A South African leader insists ‘We are not for sale’

Cyril Ramaphosa

Cyril Ramaphosa, Deputy President

Mar. 28, 2016 (GIN) – South Africans are rising up against the outsized influence of corporate entities and wealthy individuals allegedly doling out contracts and jobs within the ANC.
Deputy President Cyril Ramaphosa, at a recent event, rebutted the charge, declaring the ANC was not for sale and anyone who wanted to capture the state should “go next door.” Speaking to about 1,500 professionals and academics at the ANC event in Sandton last week, Ramaphosa declared: “Those who want to capture the ANC and influence it to advance personal or corporate interests, you have come to the wrong address. Try next door. We will not be captured.”
A South Asian family close to the president who allegedly peddled jobs within the government was not the only one exploiting their connections, he added. “There are a number of others as well, and we are saying to all and sundry, stop in your tracks, we will not allow that.”
But questions continue to be raised including at a seminar last week hosted by the Association of Public Administration and Management. Political influence by corporate entities and wealthy individuals is “at pornographic levels,” said businessman and policy analyst FM Lucky Mathebula. “That is why we hear calls of the removal of the president and regime change.”
Political analyst professor at the University of Pretoria, Tinyiko Maluleka, said state capture was “insidious,” and became entrenched over time. “The idea that two or three people capture the state in one day is useless,” said Maluleka.
Former African National Congress Youth League deputy president Ronald Lamola said the problem was not just corruption.
“This is about democracy where unelected people are able to influence the decision to appoint ministers… “This is kleptocracy,” he added, “where a few elites are able to control and direct the state, a serious subversion of democracy.”
Last week the group Equal Education released a statement calling state capture by the rich and powerful “a mortal threat to democracy” and pledged to join a “week of outrage” with other movement groups. “When our democratic state is put into the top pocket of a few rich people” then “the working class and the unemployed, the poor and the historically looted – the black majority – are attacked and further looted”.
Meanwhile, President Zuma’s daughter, Thuthukile Zuma, a recent graduate in anthropology, has been awarded a high profile tender as a supplier to a prominent local company involved in the exploration and production of oil and natural gas. Just prior to this, Thuthukile was the chief of staff in the Dept of Telecommunications and Postal Services.
At 27, she is the youngest of President Zuma’s four daughters with his ex-wife Nkosazana Dlamini-Zuma.

The new ‘scramble for Africa’

BY MICHAEL RUBIN, American Enterprise
Institute

chinas-xi-jinping-poses-robert-mugabe-and-jacob-zuma.
Chinese President Xi Jinping (front L) poses with Zimbabwe’s leader Robert Mugabe (2nd R) and South Africa’s President Jacob Zuma (C) at a summit in Johannesburg, South Africa, December 4, 2015. China is investing heavily in Africa, unlike the U.S.
SIPHIWE SIBEKO/REUTERS

As Africa emerges as one of the most dynamic economic success stories of the past decade, it increasingly seems a prize over which outside countries are willing to compete. China has sent hundreds of peacekeepers to southern Sudan, reopened its embassy in Somalia, inked a $12 billion deal to build a railroad in Nigeria , and moved to support and upgrade the African Union. Recently, it has moved to rebuild a port in the strategic (and oil-rich) island nation of São Tomé and Príncipe. Chinese are flooding into the continent, drawn by economic opportunity.
But China isn’t alone. Both Morocco and Turkey have made outreach to Africa pillars of their foreign policy, and the Islamic Republic of Iran has long cultivated diplomatic support on the continent, especially from African nations which produce uranium or those which serve on prominent international bodies like the United Nations Security Council and International Atomic Energy Agency.
Meanwhile, India is proving itself to be an economic force with which to be reckoned on the continent. I just returned from the Raisina Dialogue in New Delhi which included, among other topics, a panel exploring Asian interest in Africa. The Observer Research Foundation—co-convener of the Dialogue alongside India’s Ministry of External Affairs—has published several reports and monographs detailing India’s rising influence and ambitions in Africa and, in 2015, New Delhi hosted the India-Africa Forum Summit. Any visitor to Africa in recent years will see just how serious India has become about the African side of the Indian Ocean.
The United States, meanwhile, appears asleep at the switch. U.S.-Africa trade has dwindled under President Barack Obama and, aside from short bursts of attention ahead of rare presidential visits, remains largely ignored by the White House and the mainstream American press. Turn on any American cable network covering world affairs, and there will be any number of stories about Europe, the Middle East, East Asia, and perhaps Latin America, but little if anything about Africa.
In theory, AFRICOM should suggest a larger U.S. commitment to the continent, but the command is based in Europe rather than Africa and, regardless, the military is only one component of what should be a far more comprehensive approach at which business and investment should be at the center. After more than a dozen debates in the United States, presidential contenders on both sides of the aisle have largely ignored the continent.
There’s a new “scramble for Africa” ongoing. As in the 19th and early 20th century, it is economic, diplomatic, and strategic; fortunately, it is no longer imperial. There’s a new set of players, each of whom will benefit in proportion to their investment. The only loser at present seems to be the United States, simply because the White House has chosen to forfeit.
Michael Rubin is a Resident Scholar at the American Enterprise Institute and a former Pentagon official whose major research areas are the Middle East, Turkey, Iran and diplomacy.

What difference will Obama’s plan to bring power to Africa make?

By: BBC Africa News

Obama at solar expo

President Obama talks with African solar AFP

In February US President Barack Obama signed an agreement to bring electricity to 50 million people in sub-Saharan Africa by 2020. Neil Ford asks, even if this is possible, how many will still be left in the dark?
Perhaps the most remarkable things about the Electrify Africa Act of 2015 are that it commits the US to increased foreign aid at a time of economic uncertainty and cuts through sharp political divisions.The Republican chairman of the House Foreign Affairs Committee, Ed Royce, worked with Democrat Eliot Engel for two years to drive the bill through Congress.
The act commits the US government to supporting President Obama’s Power Africa initiative. Although headlined as a $50bn scheme, the US authorities will contribute just $7bn.
Other governments, development agencies and private sector companies are expected to provide the remainder in public-private partnerships.This will be difficult to achieve during a global economic downturn.
Even if it succeeds in its aim of bringing electricity to 50 million Africans by 2020, more than 10 times that number will still be without power.
So the Power Africa initiative is not a magic bullet, but it has at least highlighted Africa’s power supply problems.
It is easy to take electricity for granted. Most African homes lack fridges and electric cookers but even a single electric light bulb can bring security and allow children to do their homework after dark.
Mobile phones encourage economic growth but the lack of electricity makes recharging them yet another hurdle to be cleared.
According to the latest World Bank data, 35% of sub-Saharan Africans have no access to electricity.
This is a far lower figure than in any other region.
The next lowest rate is 22% for South Asia, while all five North African countries claim 100% coverage.
Most Africans use wood and kerosene for fuel, causing deforestation and thousands of fatal accidents every year.
The 35% figure masks huge variations, with electrification rates ranging from 5% in South Sudan up to 100% in Mauritius.
Connection rates in rural areas are typically worse than 10%. Most of those with electricity at home live in cities, supplied by grids that were developed in colonial times but which have failed to expand with urban growth.
Even many of those connected to the grid suffer from unreliable supplies. So those who can afford them, buy their own expensive diesel fired generators.
While South Africa relies on coal-fired plants, most African countries depend on large hydro schemes to generate electricity.
Yet unreliable rainfall means that hydroelectric production varies even during a good year and is even worse – as at present – during an El Nino event.
The main problem is a lack of revenue. Most consumers are unable to afford to pay a commercial rate for electricity.
This prevents power utilities from earning enough money to pay for new generation, transmission and distribution infrastructure; generation capacity to produce electricity; transmission to move it across big distances; and distribution to get it into people’s homes and businesses.
Either people need to become richer, or power needs to be cheaper.
Luckily, a solution may be at hand. The price of photovoltaic (PV) solar power panels is falling, while solar cells are becoming more efficient, so PV is becoming a cost-effective option. Such off-grid solutions avoid the need for expensive transmission and distribution infrastructure.
Power Africa is already supporting very small-scale solar PV. It has awarded part-funding to 28 off-grid projects, along with the technical support that small-scale developers often lack. Many more will now follow suit.
Most of these projects involve solar PV or biomass, which involves using agricultural waste as a power generation feedstock.
Power Africa describes the first kWh people gain access to as the “the most valuable” because it provides at least a single source of electric light and the ability to charge mobile phones and radios.
With its commitment to providing “cleaner power generation”, many of the on-grid ventures backed by Power Africa also involve renewable energy.
In some cases, it is directly funding generation projects, such as the 152 MW Sarreole wind farm in Senegal. More often, it will supply technical support and dedicated advisors.
It has already helped Ghana to tap its newly discovered gas reserves for thermal power production by providing regulatory advice.
New projects will be identified as more of the funding is made available.
It may be that a single grand scheme cannot solve Africa’s power problems but Power Africa can help provide local solutions, one at a time.