Wednesday, January 31, 2018

Angolan Central Bank $500 Million Swindle Foiled

The latest episode in the long-running saga of the alleged plunder of Angola's public coffers has just come to light. Thanks to the diligence of British financial watchdogs and a change of regime in Angola, what is alleged to have been an attempt by the former President's son to divert US $500 million, with his father's blessing, looks to have been halted at the eleventh hour.

Full details of the alleged fraud have yet to be revealed, but information confirmed by separate sources indicates that the new Angolan President João Lourenço has taken steps to reclaim the funds which have been frozen pending the outcome of an international investigation. A spokesman for the UK's National Crime Agency told us: "We can confirm that the NCA's International Corruption Unit is investigating a case of potential fraud against the Angolan government."

The NCA spokesman said they could not provide any further details at this time - which implies the investigation is active and ongoing. However, a source familiar with the information supplied by the British to Angola's Unidade de Informação Financeira (UIF - the Financial Intelligence Unit) has revealed that it involves the transfer of US $500 million from the Banco Nacional de Angola (BNA - the National Bank of Angola), personally approved by former President José Eduardo dos Santos, to the account of a beneficiary named as 'Mais Financial Services' at the London branch of Crédit Suisse.

Whose wealth?

José Filomeno dos Santos, known as Zenú, was his father's appointee to head Angola's sovereign wealth fund (the Fundo Soberano de Angola, FSDEA). The FSDEA, launched in 2011 with an initial capital of five billion US dollars, with annual injections of income from Angolan oil revenues, was to be invested in economic diversification for the good of the country. Instead the principal beneficiaries appear to have been the (former) presidential family and their business associates.

As Chairman of the Board, José Filomeno dos Santos, known as 'Zenú' entrusted the administration of the FSDEA investments to his associate, Jean-Claude Bastos de Morais, a Swiss-based financier with dual Swiss and Angolan nationality... and a previous conviction for financial crime.

This sent up an immediate red flag - after all, it is not often that a convicted felon is appointed to oversee a billion-dollar sovereign wealth fund. And, as time went by, evidence emerged that Mr Bastos de Morais was using this lucrative source of capital to enrich himself. Along with the revelations from the Paradise Papers, evidence emerged that the FSDEA funds were being consistently invested in an array of recently-registered new companies, which to no-one's surprise were either directly owned by Mr Bastos de Morais or whose nominal owners were associates of his.

International corruption watchdogs and investigators swiftly concluded that the FSDEA was being used for personal enrichment. With Angola branded as one of the most corrupt countries in the world by Transparency International, and with every branch of the state institutions filled with party members beholden to the ruling MPLA and its President, José Eduardo dos Santos, there was zero possibility of an internal investigation into what was, on the face of it, another instance of a greedy presidential family robbing the public purse.

President Dos Santos's 38-year misrule was, however, about to end.

Having bled the Angolan Sovereign Wealth Fund dry, José Filomeno dos Santos turned to another "honey pot": the Angolan Central Bank (BNA).

Last roll of the dice

In the final weeks of his presidency José Eduardo dos Santos summoned the then Governor of the National Bank of Angola (BNA), Valter Filipe, and the Finance Minister, Archer Mangueira, to MPLA headquarters. The President had just chaired a session of the ruling party's Political Bureau beforehand.

Behind closed doors, the President gave each man a dossier to read there and then, and waited while they read through it. The dossier purported to be a proposal to put together an international credit line for Angola, worth some 30 billion US dollars - quite an astonishing turn of events given the financial crisis affecting the country at the time. A flurry of reports suggested the government was finding it increasingly difficult to convince their usual backers to lend them any more money and that the precipitous drop in oil revenues was already making it difficult to service their existing external debt, totalling somewhere between 37 and 43 billion dollars.

The President then called his son, José Filomeno dos Santos, 'Zenú' into the room and ordered both the Finance Minister and the BNA Governor to accompany 'Zenú' to London aboard a privately-chartered aircraft that very night to begin immediate negotiations to secure the credit.

Accompanying them aboard the chartered jet was Zenú's childhood friend and business partner, Jorge Gaudens Pontes Sebastião, Chairman of the Board of the Banco Pungo Andongo and also head of the National Council for Quality Control. Zenú and Jorge Sebastião already co-owned a business named Inpal (Investimentos e Participações Lda), which in turn held a 49% stake in Standard Bank Angola. At this stage they had not declared any link to the credit cartel.

Meeting in London with with the representatives of the cartel behind the credit proposal, operating as 'Mais Financial Services', Angolan sources say they were taken aback to find that both Zenú and Jorge Sebastião were acting as "members of the foreign team", leaving the Angolan Minister and Bank Governor isolated as the sole representatives of the Angolan State.

The identities of the other participants at this meeting have not yet been revealed but a Portuguese weekly newspaper (Expresso) is reporting that three Brazilians were involved and two "are already in the hands of the British authorities". According to 'Expresso' the Brazilians were acting on behalf of a company named as 'Perfect Brint'.

Curiously, there is no British-registered company named 'Mais Financial Services' registered with Companies House in the UK, but there is a 'Mais Financial Services, Lda.' registered in Luanda, Angola at the same address as 'Investimentos e Participações, Lda.', whose owners are the aforementioned President's son, José Filomeno dos Santos (with 75%) and his lifelong buddy and business partner, José Gaudens Pontes Sebastião (with 25%).

To his credit, Archer Mangueira was unconvinced that 'Mais Financial Services' could possibly have sufficient clout to pull together a thirty-billion-dollar credit package from foreign investors. The amount was greater than Angola's "pillar" of solvency - its current reserves.

For his part, Valter Filipe commented that he would refer the proposal for technical analysis before forming an opinion to convey to José Eduardo dos Santos.

On their return to Luanda, the Minister and Governor were supposed to draw up a report expressing their joint opinion on the proposal. However, Archer Mangueira prepared his individual opinion before calling on the BNA Governor to add his imprimature to it. Valter Filipe refused. His justification was that Mangueira had not called for a technical analysis but merely expressed a negative opinion.

The BNA Governor went on to arrange a meeting between the Bank's technical analysts and José Filomeno dos Santos at BNA headquarters. Together they drew up their technical opinion which turned out to be in favor of the proposal.

Both opinions were sent to the President, who approved the document drawn up by his son and the BNA governor.

Archer Mangueira was said to have "lost the President's ear". His rival, Valter Filipe, gleefully claiming ascendancy, was ordered by the President to take charge of coordinating a commission to negotiate the line of credit. At this point the "British party", i.e. 'Mais Financial Services', demanded as a financial guarantee that the BNA transfer US $500 million into their account.

This "financial guarantee" request was forwarded to President dos Santos for approval and he gave the green light. The BNA then proceeded with the transfer and Valter Filipe promptly sent the confirmation proof to the President.

New broom

On August 23, 2017, João Lourenço was elected as the new Angolan President. A month later, President Dos Santos stepped down as head of state but remains president of the ruling MPLA. The country was relieved to see a peaceful transition of power, albeit within the same ruling party, with President Lourenço offering hope of a crackdown on the endemic corruption impoverishing the nation.

In his first meeting with the new President shortly after he was sworn in, Finance Minister Archer Mangueira briefed João Lourenço on the precarious state of the public finances, including the negotiations underway to obtain that US $30 billion, overseen by Zenú and Valter Filipe. Mangueira admitted he had been sidelined from the negotiations because of his lack of faith in the proposal.

João Lourenço summoned Valter Filipe and after questioning him, ordered that the dossier be handed over to Archer Mangueira. In the interim, the supposed international credit cartel brokers had issued another invitation to the Angolan delegation to meet in London to continue negotiations, the first such meeting since the US $500 million transfer.

When they discovered that it would be Archer Mangueira heading the government team, and not Valter Filipe, the credit brokers protested. They had been counting on José Filomeno dos Santos retaining the powers granted him by his father when he was in charge. They were to be disappointed.

On October 23, 2017, the parties gathered for the London meeting. On the Angolan side were Archer Mangueira, Valter Filipe, two Finance Ministry advisers and two BNA experts. As on the previous occasion, José Filomeno dos Santos and Jorge Gaudens Pontes Sebastião took positions for the foreign team.

However, by then, Archer Mangueira had a trump card up his sleeve. He alone was privy to an alert from the British financial authorities. A notification had been sent to Angola's Financial Information Unit (Unidade de Informação Financeira, UIF), which although it receives an operating budget from the BNA, reports directly to the Finance Ministry.

The British were politely inquiring about the legitimacy of the US $500 million transfer from the BNA to 'Mais Financial Services', given some procedural anomalies that had sent up a red flag.

Archer Mangueira kicked off the meeting by talking about the new President's scrupulous regard for the rules and then left it to the Ministry's financial experts to dissect the proposal and demonstrate how the credit agreement would not be to Angola's benefit. The BNA Governor made a last-ditch attempt to salvage the deal, brandishing confirmation of the money transfer and recommending that they go ahead and fulfill the agreement.

The Finance Minister demurred, saying that he could not recommend to President João Lourenço any continuation of the negotiations. The very next day, October 24, Archer Mangueira conveyed this opinion to the President who summoned the BNA Governor to an audience on October 25.


At that meeting, João Lourenço gave three quick commands to the central bank governor before wishing him luck. First: abort the operation, on the grounds of the lack of credibility of the foreign parties; Second: take immediate steps to have the US $500 million returned to Angola; Third: submit his resignation by October 27.

In disbelief, Valter Filipe (who in addition to his position as BNA governor was also a member of the MPLA central committee) tried to contact his party leader for instructions as to how to proceed - José Eduardo dos Santos. Clearly it was to no avail as Valter Filipe's resignation was announced on October 27.

On November 10 João Lourenço removed Jorge Gaudens Pontes Sebastião, from his position as Executive Secretary of the National Council for Quality Control (Conselho Nacional do Sistema de Controlo e Qualidade).

Two months later, on January 10, 2018, João Lourenço relieved José Filomeno dos Santos of his duties as President of the Angolan Sovereign Wealth Fund.

To date, no criminal investigations have been launched in Angola into the alleged conspirators, chief among them former president José Eduardo dos Santos. The US $500 million remain frozen in the United Kingdom.
Mozambique Takes Legal Action Over $2 Billion Loans
January 29, 2018 2:42 PM

MAPUTO — Mozambique's Attorney General has filed a legal complaint against officials and state-owned companies involved in securing $2 billion in loans that were not approved by parliament or disclosed publicly, her office said on Monday.

Investigations into the debt found that the deals violated Mozambique's constitution, the AG's office said in a statement.

The alleged infringements included failure to comply with the procedures and limits established by law in the issuance of guarantees by the state, it said.

"Thus, on January 26, the [office] submitted a complaint to the Administrative Court on the financial accountability of public managers and state-owned companies involved in the management of financing, supply and service contracts," the statement read.

It did not name any of the managers or the companies.

The Administrative Court is responsible for ruling on the legality of public expenditure.

An independent audit of the debt showed in June last year that questions remained on how the $2 billion was used and roughly a quarter of the money remained unaccounted for.

The Attorney General also recommended among other issues a review of legislation related to state businesses and scrutiny and monitoring of projects benefiting from state guarantees.
Statoil Quits Talks Over Stake in Mozambique Offshore Gas Block
OSLO, Jan 29 (Reuters) - Norway’s Statoil said it has pulled out of negotiations to take a 25.5 percent stake in a gas block off Mozambique, citing a lack of progress after more than two years of talks.

Statoil, Eni, South Africa’s Sasol and Mozambique’s national oil and gas company ENH were awarded the exploration rights in the A5-A block within Mozambique’s Northern Zambesi basin in 2015.

“Statoil has decided to disengage from negotiations on block A5-A in Mozambique... We are not part of this any more, it is up to the other partners to make any moves regarding the stake,” Statoil spokesman Erik Haaland told Reuters on Monday.

The lack of progress in the negotiations and an unfavourable business environment prompted Statoil’s decision, Haaland said.

The future of the joint venture after Statoil’s withdrawal lies with the remaining partners, he added. “If they want to continue, there are mechanisms in the bidding process allowing them to do so.”

The block, covering a total area of 5,145 square kilometres (1,987 square miles), was seen as having “significant hydrocarbon resources”, Eni said in 2015.

After quitting its bid for A5-A, Statoil has no further assets in Mozambique, which is in the throes of a debt crisis but has large untapped natural gas reserves.

(Reporting by Lefteris Karagiannopoulos; Editing by Nerijus Adomaitis and Susan Fenton)
Fight for Lower Interconnection Rates in Mozambique, Tanzania Justified
31 January 2018
By Matshelane Mamabolo
IT Web Africa

The introduction of lower interconnection tariffs by Mozambique's Communications Regulatory Authority (INCM) late last week and recent public hearings on proposals to do the same in neighbouring Tanzania, by the Tanzania Communications Regulatory Authority (TCRA), are well placed according to telecoms industry analysts.

Dobek Pater, Director at Africa Analysis says a reduction in interconnect rates often results in reduction of retail tariffs for consumers.

"Although retail tariffs are normally not regulated, the reduction in wholesale costs (through interconnect rate reduction) can impact retail tariffs positively (for users) when operators reduce tariffs for off-net calls. The reduction in retail tariffs is normally a bit lower than the reduction of the interconnect rates, in monetary terms."

The new rates for Mozambique were published in the country's government publication Boletim da República for the period 2017 to 2020. The reductions will be phased in at 0.48, 0.43, 0.39 and 0.37 meticais per minute for the years 2017, 2018, 2019 and 2020 according to INCM.

Tanzania's TCRA proposes a reduction of the voice call termination rate per minute to TZS 15.60 for 2018 and then even further to TZS 10.40 on the first day of January 2019 and then to TZS 5.20 in 2020. The proposed rates for 2021 and 2022 are TZS 2.60 and TZS 2.00 respectively.

Pater adds that market regulators normally aim to reduce interconnect rates so that they are cost-based. This means that operator A should not charge operator B in interconnect rates more than what it costs in equipment, admin, etc. to handle the traffic coming from operator B network onto the operator A network.

"Operators should not be releasing any profit on interconnect charges. This has already been achieved in many more developed markets, but not in most markets in Africa although there are some exceptions that have achieved it, or close to it. Also, smaller operators are often granted asymmetry by the regulators. This means that a smaller operator can charge higher interconnect rate per minute to a larger operator than vice versa. The objective is to reduce the imbalance in payments between smaller and larger operators, so that smaller operators are not disadvantaged financially too much in this market."

Implications for MNO profitability

On whether the reduction of interconnect fees will harm the bottom line of operators running their business in Mozambique and Tanzania, Pater says this will depend on the operator.

"Large operators are often net receivers of interconnect revenue, while small operators are net payers of interconnect revenue. This means that the large operators generate larger revenues (and profit) from interconnect, while small operators end up paying (losing money) on interconnect on a net basis...for example, in South Africa, Vodacom (the large operator and gainer from interconnect) used to receive around R6 billion annually in interconnect revenue. Since the reduction of interconnect rates over the past several years, Vodacom's interconnect revenue has been reduced to around R1 billion annually."

Arthur Goldstuck, Managing Director of World Wide Worx says mobile network operators (as seen in South Africa) have an interest in keeping the interconnect fees high or unregulated as it is highly profitable for them, although it is punitive for the consumer making it necessary to avoid profiteering by the MNOs where it is not necessary.

"In South Africa, it was used by the two major operators to limit the effectiveness of a third operator's entry into the market. The regulator allowed the interconnect fee to shoot up from 25c to R1.25, instantly making South Africa one of the most expensive countries in the world for mobile calls. This strategy was so effective for MTN and Vodacom, that Cell C was never able to compete effectively.

The robust efforts by the major operators to persuade the regulator not to cut the fees gave an indication of how strongly it contributed to their cash flow and, ultimately, profits. However, the consumer was the big loser, and the situation was untenable. Call costs have plunged since the enforced reduction of interconnect fees. It (reducing interconnection fees) is no mere useful exercise; it is fundamental to making communications more affordable."
South Africa Stands to Benefit from Mozambique’s Coral Gas Development
Monday, 29 January 2018 21:44
Cape Business News

South Africa’s mooted gas-to-power independent power producer (IPP) programme stands to benefit from Mozambique’s Coral Floating Liquefied Natural Gas (FLNG) development, according to Standard Bank head of oil and gas: Southern Africa Paul Eardley-Taylor.

The Coral field, discovered in May 2012, is located within Area 4, Mozambique and contains approximately 450 billion cubic meters (16 TCF) of gas.

Italian energy company ENI last year announced that it had signed a sale and purchase agreement with the US company ExxonMobil, under which ExxonMobil will pay US$2.8 billion for a 25 per cent stake in offshore Area 4, which is situated in the Rovuma Basin in northern Mozambique.

Eardley-Taylor this week said, post commercial operations, Coral LNG would generate cash flows for Mozambique - through tax proceeds - as well as balance of payment benefits. 

“It is a landmark investment in Mozambique that represents over 70 percent of 2016 gross domestic product. FLNG is also a pathfinder that gives momentum to Mozambique’s developing onshore LNG projects, which as well as major tax proceeds offer significant localisation, employment and domestic gas opportunities,’’ he said.

He said increased industrial activity in Mozambique would benefit South Africa as a major trade partner with Mozambique. “In addition, South Africa has explored a gas-to-power programme and Coral FLNG is a future potential physical supplier to that scheme, noting the low shipping costs involved,’’ said Eardley-Taylor.

Standard Bank and its 20 percent shareholder, the Industrial and Commercial Bank of China (ICBC), have backed Mozambique’s Coral Floating Liquefied Natural Gas (FLNG) development. Through an investment of approximately $8bn investment, they are the project’s largest lenders.  Standard Bank said the investment marked Mozambique’s first step as a regional and global offshore natural gas producer and supplier. 

“This game-changing transaction initiates a cycle of energy investment set to return Mozambique to growth, while heralding the country’s arrival as a key global liquefied natural gas supplier.

“Our support of the funding of the Coral FLNG project grew out of our long-term commitment to Mozambique, consistently supporting the country’s potential as a future offshore natural gas production and export giant,” said Eardley-Taylor.

In addition to the Coral FLNG project, Standard Bank has worked with other companies in Mozambique. These include Sasol, The Republic of Mozambique Pipeline Investments Company (ROMPCO), Mozambique’s state-owned oil and gas company ENH ENH, Companhia Mocambiçana de Gasoduto S.A (CMG, and Companhia Moçambicana de Hidrocarbonetos (CMH). Standard Bank also authored Mozambique’s landmark LNG macro-economic study informing the development of the 2014 Rovuma Basin Decree law.

 The transaction was in line with Standard Bank and ICBC’s vision and strategy to develop East Africa as global energy production and supply hub – especially to East Asia, Standard Bank said. 

“Global interest in Mozambique and the region’s potential as future energy suppliers is reflected by broad international participation in the deal. Export credit agencies, including Coface (BPI), K Exim, K Sure, Sace and Sinosure, are joined in this transaction by leading global energy giants ENI, Petrochina, GALP, ENH and Kogas,” Standard Bank said.
 ICBC and Standard Bank said the deal was an important signal on Mozambique’s longer term growth prospects.

“This transaction demonstrates ICBC and Standard Bank’s vision of driving Africa’s growth by attracting foreign direct investment back into Mozambique’s promising energy production and export sector. This game changing transaction puts East Africa on the map as a global energy supplier,” said Eardley-Taylor. 
Opposition Fortunes Wane as Tanzania President Rules Supreme
By Omar Mohammed
January 31, 2018, 10:41 AM EST

Leader Magufuli’s opponents become allies in his reform drive
Dissent becoming rarer in country amid arrests, media closures

John Magufuli Photographer: AFP via Getty Images

Two years into his rule, Tanzanian President John Magufuli has some unexpected new fans: his political opponents.

His chief rival in the 2015 vote, Edward Lowassa, has praised his reforms and urged others to support them. Another challenger became one of his regional commissioners, while two opposition lawmakers recently defected to the ruling party and will run as candidates in February by-elections.

These could be signs that Magufuli, who’s nicknamed “the bulldozer,” is finding popular support for his bids to tackle graft and challenge foreign companies like Barrick Gold Corp. and Bharti Airtel Ltd. for more revenue. But, following the arrests of other politicians and shuttering of several news outlets, some analysts say it also points to the decline of political dissent.

Tanzania’s opposition was always limited. Magufuli’s Chama Cha Mapinduzi party and its earlier iterations have ruled ever since the nation was unified in 1964, winning all five multi-party elections that began in 1995. All the same, rights groups and the opposition say there was leeway for criticism -- until recently. It comes as opposition movements elsewhere in East Africa feel the squeeze as leaders from Burundi to Uganda further entrench their reigns.

‘Losing Horse’

“Backing the opposition in an authoritarian state is backing a losing horse,” said Dan Paget, a doctoral candidate researching Tanzania at the University of Oxford. “People are defecting from the opposition not only because they love Magufuli, but because they fear him.”

The detention of some lawmakers last year for allegedly making inflammatory statements against the government sent a “strong message,” according to Aidan Eyakuze, executive director of civil-society group Twaweza East Africa.

Politicians may also be seeking career advancement, according to Benson Bana, political science lecturer at the University of Dar es Salaam. “Some don’t see that the opposition will win State House anytime soon, so see working for the ruling party as a chance to shape policy,” Bana said.

The 2010 presidential candidate for the main opposition party Chadema, Wilbroad Slaa, was in November appointed ambassador to an as-yet unidentified country. This week he met Magufuli and praised him for solving problems he’d railed against in opposition, according to a presidential statement.

Opposition’s Clothes

There could be a simpler reason for the fresh support: Magufuli is pursuing policies that were the opposition’s. He’s also gained backing from his confrontations with foreign investors: a demand for $190 billion in back taxes from Acacia Mining Ltd. led to the company agreeing to establish a model to equally share the economic benefits from its mines and pay $300 million to the state as a “show of good faith.”

The Chadema party “was united by its opposition to corruption in government” and Magufuli has made tackling graft his “moral mission,” Paget said. “The same goes for mining: Chadema had won votes with their tough stance on mining companies for a decade, but in six months Magufuli garbed himself in the opposition’s clothes.”

Zitto Kabwe, the leader of the opposition Alliance for Change and Transparency who was detained last year, acknowledged Magufuli’s anti-graft crusade is “taking the message away from the opposition.”

While presidential challenger Lowassa rebuffed an offer to rejoin the ruling party, others had fewer qualms. Lawrence Masha was home affairs minister in the government of Jakaya Kikwete, Magufuli’s predecessor, before shifting to the opposition in 2015. He moved back -- because of Magufuli.

Impact, Accountability

“While you may not always agree with the way he does things, his heart is in the right place and it is having an impact on the lives of everyday Tanzanians,” Masha said. “There is accountability in Tanzania with regards to corruption, for example, for the first time in a long time.”

It’s unclear how effective that drive has been. While a May 2017 survey by the Afrobarometer research network showed 72 percent of Tanzanians thought there’d been a decline in graft, Transparency International’s Corruption Perceptions Index ranked it one point worse in 2016 than in 2013.

A June poll by Twaweza showed 71 percent of Tanzanians approved of Magufuli’s performance. While lower than the 96 percent he attracted a year before, it’s more than the 58 percent of the national vote he garnered to win him the presidency.

The opposition needs to fully question government claims of progress, Eyakuze said.

Kabwe said they must offer fresh policies as alternatives to the ruling party, especially in areas where they control local governments.

“Places where the opposition have a mandate, we need to show improvements in anti-corruption and development,” he said.
Rwanda, Tanzania Finance Ministers Meet Over Joint Railway Financing
By James Karuhanga
The New Times

Rwanda and Tanzania Finance ministers on Monday met in Dar es Salaam, Tanzania, to consider the finance matters regarding accomplishment of the two countries' joint 521 kilometre Isaka-Kigali Standard Gauge Railway (SGR) project, which is estimated to cost $2.5 billion.

The Minister for Finance and Economic Planning, Amb. Claver Gatete and his delegation including the Permanent Secretary and Secretary to the Treasury, Caleb Rwamuganza, met with his Tanzanian counterpart, Dr. Philip Mpango and his team as a follow up to the meeting held January 20 by the countries' Ministers for Infrastructure on the same project.

Gatete on Tuesday told The New Times That: "Yes we met but it is all work in progress and we continue to look at matters such as structure [of financing], possible partnerships, and the progress of the project.

"We are on the right track as our meeting was a follow up to that held recently by the ministers for infrastructure of Rwanda and Tanzania in Dar es Salaam. We shall continue to discuss the possible options, including partnership with the private sector and any other partners."

Sources say the latest meeting, among others, agreed that some critical issues including feasibility studies impacting on cost be re-examined so that both countries have a clearer picture on the financial implications before charting the way forward as regards mobilising funds.

The project's estimated total cost of $2.5 billion was made in 2015 and it is possible that there could be changes that need to be well factored in considering inflation and other economic factors.

Rwanda and Tanzania agreed on joint construction of the SGR from Isaka (northwestern Tanzania) to Kigali, to facilitate movement of goods and services, following a meeting between Presidents Paul Kagame and John Pombe Magufuli, during the former's one-day working visit to Dar-es-Salaam, mid-January.

On January 14, the two countries' leaders directed their ministers responsible for transport to meet within two weeks to deliberate on how to implement construction of the joint railway line.

Nearly 80 per cent of Rwanda's imports and exports go through Tanzania.

When Ministers for Infrastructure met in Dar es Salaam, on January 20 to consider implementation of the joint project they, among others, adopted feasibility studies already conducted in the two countries, agreed that the foundation stone be laid by October, and the two countries jointly mobilizing funds for construction of the joint project with each country meeting the cost of infrastructure in its own territory.

Gatete reiterated that appropriate effort is being put in to fast-track things such that the foundation stone is laid before year end.

Earlier, the Ministers for Infrastructure adopted the proposed timeline towards implementation of the Presidents' directives so as to lay the foundation stone by October, 2018.

Officials in both countries say the project is crucial as, once realised, it will reduce transport costs, foster physical integration of transport modes, economic growth and improved social services in the sub region, among others.

Despite progress made in the judiciary in recent years, some gaps are still present in the law in relation to the… Read more »

Read the original article on New Times.
Zambia Records Poor Rating On Global Transparency Index
George Mwenya
Zambia Reports
January 31, 2018
Zambia is among the least transparent countries in relation to national budget implementation, according to the Open Budget Survey (OBS) 2017 conducted by the International Budget Partnership.

This is based on the information assessed between July 2015 and December 2016.

Jesuit Centre for Theological Reflection (JCTR) Executive Director Fr. Emmanuel Mumba is worried that after recording a 38 percent rate in 2016, the country recorded a dismal eight percent in 2017.

Speaking during a media briefing, on the Open Budget Survey 2017 results launch, Father Mumba says Zambia has not made budget documents available for scrutiny online and in publications.

Fr. Mumba says Zambia’s Open Budget Index (OBI) score of eight percent means that citizens have little or no access to the budget information they need to understand the budget and hold the government to account.

He says during the research period, Zambia decreased the availability of the budget information by producing the year- end reports for internal use only, not producing the pre-budget statement and failing to make available in a timely manner the mid-year review budget documentation.

And Fr. Mumba says African countries will continue being negatively judged on account of poor or dismal perception by the global community.

Fr. Mumba has recommended that to improve transparency, Government needs to be consistent in making publicly available the eight key budget documents through their official websites.

He is of the view that the planning and budgeting bill and the public management bill should be enacted within 2018, stressing that once enacted the bills will help provide for citizens participation and strengthening budget oversight respectively.

Speaking at the same event, Ministry of National Development and Planning Principal Planner Joseph Musonda says Zambia is now finalizing the 2017/2021 7National Development Plan anchored on five pillars.

Musonda says under pillar five on diversification, transparency and accountability mechanisms are being strengthened.

He has also explained that Information Communication Technology in the country is not developed, thus the challenges in publishing documents online.
Zambia’s Economy is Bouncing Back, Wina Tells Zambians in Ethiopia
January 31, 2018

Vice President Inonge Wina has told Zambians living in Ethiopia that the country’s economy is bouncing back from the recession it experienced during the last economic performance of 2016/2017.

ZANIS reports from Addis Ababa, Ethiopia that Mrs Wina said this when Zambia’s Ambassador to Ethiopia Susan Sikaneta hosted a dinner in her honour.

Mrs Wina assured the Zambian community that Government remains committed in ensuring the provision and delivery of socio-economic services to its citizenry.

She further added that government has put up various measures that will help in boosting and sustaining the country’s economic performance.

The Vice President cited the Seventh National Development Plan as one economic measure that Government is implementing in order to rescue the country from its economic and social challenges.

“Government has a mammoth task to meet the obligation of the 7th National Development Plan which is anchored on many pillars of development”, she stated.

Mrs Wina observed that Zambia’s setbacks experienced include, among others, the reduction of copper prices which affected Government’s revenue collection thereby resulting in poor provision and delivery of socio-economic services.

The invasion of army worms which may affect the agriculture production performance is another setback.

She, however, informed the gathering that Government is doing everything possible to ensure no Zambian starves to death.

According to Mrs Wina, Government may consider diverting funds from other sectors for purposes of ensuring that there is sufficient food for everyone.

The Vice President further said the outbreak of cholera saw the country lose more than 70 lives.

She indicated that Government worked so hard to stabilize the situation.

And Zambia’s Ambassador to Ethiopia Susan Sikaneta thanked the Vice President for Government’s decision to construct a block of flats for the Zambian diplomatic staff working in Ethiopia.

Mrs Sikaneta observed that the project will help government cut down on costs.

She observed that apart from the project accommodating the Zambian diplomatic staff, it will also rent out to the diplomatic community, a situation that will result in increased revenue collection.

And chairperson for Zambians resident in Ethiopia Jacob Zulu thanked Government for being proactive over the diaspora policy.

The Vice President was accompanied by Ministers of Foreign Affairs Joseph Malanji, Home Affairs Stephen Kampyongo, and Mines and Minerals Christopher Yaluma.
Politics in the Time of Cholera: Zambia's U-turn on Street Vending
By Danielle Resnick

For the last year, 12 countries in East and Southern Africa have been grappling with a cholera outbreak estimated to have resulted in almost 2,000 deaths and more than 100,000 hospitalizations.

Zambia’s outbreak began in October 2017, then experienced a brief lull before exploding in early December. More than 3,000 people have been affected and close to 80 have died.

In contrast to many other countries fighting the epidemic, Zambia’s outbreak is disproportionately concentrated in the capital city of Lusaka and especially in the low-income, high density informal settlements, known as compounds, that surround the city center. The compound of Kanyama, home to about 370,000 of Lusaka’s 1.7 million residents, is the worst-affected.

Cholera has been a challenge for Lusaka since the first major outbreak in 1990. Since then, cases have been recorded almost every year, and always correspond to the rainy season, which lasts from October to May. Due to their history as unauthorized settlements, many of the compounds are not connected to the sewer system and rely heavily on pit latrines. Lacking drainage and often located along unpaved roads, the rains often cause the pit latrines to overflow and garbage to drift away.

While the problem is perennial, the Government of Zambia’s response this year was particularly contentious with citizens. After investigations revealed that the outbreak was caused by contaminated food, in early January the Zambia police and army demolished 10,000 stalls, known locally as tuntembas, belonging to street vendors in Lusaka in an effort to address the outbreak.

A week later, the army was called into Kanyama to quell riots by residents angry about the Government’s enforcement of the 2007 Street Vending and Nuisances Act, which allows the Lusaka City Council to ban street vending. The implementation of the ban is devastating for the livelihoods of Lusaka’s poor, who disproportionately comprise the city’s street vendors.

Such crackdowns on street vendors are certainly not uncommon in Africa. Vendors often sell fresh fruits and vegetables or prepared foods, and they are often targeted when cholera strikes. Yet, such crackdowns have been relatively rare in Lusaka since the Patriotic Front (PF) party took over government in 2011 after the election of the late President Michael Sata. Street vendors and market traders were the core of Sata’s urban constituency, and in successive election campaigns, he had vowed not to remove them from the streets given the country’s lack of formal employment opportunities.

In 2011, Sata issued a letter to town clerks and council secretaries ordering them to cease all harassment of street vendors, and the PF’s general secretary even suggested that vending should be legalized. In 2012, Sata demoted his Minister of Local Government when she planned to sign a new statutory instrument against vending. A new market comprised of street vendors, known as Donchi Kubeba, even was allowed to organically emerge on a flyover bridge in the city, heavily populated by unemployed PF party loyalists.

After Sata passed away in 2014, his successor, Edgar Lungu, essentially pursued the same policy. Lacking Sata’s charisma and popularity, Lungu has tried to mobilize support by continuing to allow street vending, even to the point of weakening the LCC’s legal authority over managing the issue and undermining decentralization efforts. In 2015, he further established the Presidential Empowerment Initiative Fund to provide loans to street vendors and marketeers.

The PF’s longstanding approach of not enforcing laws over vending has been a politically expedient and seemingly costless form of buying votes from the urban poor. However, it also allowed street vending to mushroom to unsustainable levels, with clear negative implications for the health and sanitation of Lusaka’s residents, including of the vendors themselves.

Initial survey findings through a joint IFPRI-International Growth Centre project find that vendors often lack access to clean water and proper toilets, and the lack of drainage within markets is a constant concern during the rainy season. More broadly, the WHO/UNICEF Joint Monitoring Programme for Water Supply and Sanitation (JMP) shows that the proportion of the population using improved water sources in urban Zambia actually decreased between 2010 and 2015, from 49 to 47 percent, while those with at least basic sanitation fell from 51 to 49 percent.

Seventy-five percent of the urban population has no access to basic handwashing services with both water and soap. The disparity on some of these indicators between the poorest and richest quintiles of the urban population is significant. Indeed, while 85 percent of the richest urban quintile has access to sanitation, the equivalent among the poorest quintile is only 10 percent.

In a city where cholera has been an annual event for the last two decades, informal vending must be effectively but also humanely managed to improve basic sanitation while avoiding unpredictable bans that hurt some of the city’s most vulnerable citizens.

Beyond sensitizing vendors about safe food handling practices, the Government must stay committed to implementing Zambia’s 2015 National Urban and Peri-Urban Sanitation Strategy and recognize that access to safe water, sanitation, and hygiene is needed not only where people live but also where they work. The World Urban Forum, taking place Feb. 7-13 in Kuala Lumpur, Malaysia, will certainly re-energize advocates in Zambia and beyond around key Sustainable Development Goals, including Clean Water and Sanitation (Goal 6), Decent Work (Goal 8), and Sustainable Cities (11).

Amid Zambia’s increasing political divisions, the challenge will be to ensure that long-term policy commitments to a water, sanitation, and hygiene (WASH) agenda are sustained beyond such high-level events and are not forgotten in favor of easy vote-buying tactics, especially as the country’s 2020 elections loom just around the corner.

Danielle Resnick is a Senior Research Fellow in IFPRI's Development Strategies and Governance Division.

Tuesday, January 30, 2018

Will Africa Allow the Free Movement of People?
January 30, 2018
Ottilia Anna  Maunganidze Correspondent

The real test is not the endorsement of protocols in Addis Ababa, but what action individual states take. Free movement of people is key to unlocking Africa’s economic potential, but achieving it requires better management of migration. The issue is on the agenda at this week’s African Union (AU) summit in Addis Ababa.

Leaders are expected to consider and adopt the Draft Protocol to the Treaty Establishing the African Economic Community on Free Movement of Persons, Right of Residence and Right of Establishment (Free Movement Protocol) and its Draft Implementation Roadmap.

Migration governance and policy in Africa needs to emphasise the economic and development benefits of people moving across the continent’s borders, while minimising the short-term downside of mass migration.

Policies are also needed to address problems like xenophobia, the marginalisation of migrants and the limited resources of host countries. However, policies and protocols are ineffective when they’re not coherently and consistently implemented, and this requires commitment and political will from all African countries.

Migration within and out of Africa has a long history shaped by developments before, during and after colonialism. During the slave trade, millions of Africans were forced to move across the Atlantic. This continued under colonialism, with Africans providing labour for colonial economies.

Post-colonial African migration is predominately within the continent, particularly between neighbouring countries. In 2013, 65 percent of the 20 million sub-Saharan African migrants, who had left their countries, were still living in the region. Migration within and outside of Africa is expected to increase, in part because of continued population growth, with the working-age population of Africa expected to double to 1,3 billion by 2050.

The leading host countries for migrants in Africa are Côte d’Ivoire (with 2,3 million African migrants), South Africa (2 million) and Nigeria (0,9 million). Gabon, Algeria and Morocco are emerging as African migration destinations.

Meanwhile, Uganda and Ethiopia host the largest refugee populations on the continent. In December 2017, Uganda was home to over 1,4 million refugees (75 percent of them from South Sudan). Ethiopia currently hosts over 890 000 refugees (most of whom are from neighbouring South Sudan and Somalia). While final data from the United Nations Refugee Agency (UNHCR) for 2017 is still not available, the two were placed fifth and sixth respectively in the world as hosts of refugees in 2016.

With the sharp rise in 2017, their ranking could be higher now. Africans also migrate to other parts of the world, constituting 8 percent of the nearly three million refugees in Europe in 2014.

What makes people move?

Drivers of African migration include the desire for a better and safer life, and the search for work. People are also forced to move by war, harsh economic climates, bad governance and environmental degradation. Remittances – money sent by migrants to their home countries – are one of the biggest benefits of migration for African countries.

In 2008, they overtook foreign direct investment and international aid as the largest source of foreign exchange earnings for sub-Saharan African countries. However, Africa’s loss of skilled and educated people remains a major negative consequence of migration. There are some policies and legal frameworks in place in Africa.

The AU and the continent’s regional economic communities have had migration policies for many years, covering issues from better management of migration to free movement of people, humanitarian approaches to refugees and management of human trafficking. The Organisation of African Unity’s 1991 Treaty Establishing the African Economic Community (the Abuja Treaty) was the first that focused on free movement of people and capital to enhance regional integration and development.

And the 2006 Migration Policy Framework set out the AU’s position that well-managed migration had the potential to yield significant benefits to both origin and destination countries.

The framework lists deteriorating political, socio-economic and environmental conditions, as well as armed conflicts, insecurity, environmental degradation and poverty, as significant root causes of mass migration and forced displacement in Africa. But a clearer, more coherent pan-African position on migration is needed, along with greater commitment to coordinated action at a national and continent-wide level.

Migration policies and laws need to be implemented at the speed at which people cross African borders, either legally or as irregular migrants. Another hurdle is that some states are members of several regional economic communities, each with their own – sometimes clashing – provisions on freedom of movement.

Resources, mainly financial, are wasted when regional initiatives are duplicated. A coordinated single process would help countries manage migration and accelerate the free movement of people and capital on the continent. Collaboration between the AU and the European Union has produced several legal frameworks, policies, plans and dialogues that deal with mass migration, trafficking, mobility, border management and employment.

For both continents, effective migration management has the potential to produce mutual benefit. The AU and African countries need to put their money where their mouths are. Commitment to freedom of movement and the great potential it holds must go beyond adopting the draft protocol and its roadmap. It’s up to states to make freedom of movement a reality for African citizens.

AU Must Ensure Foreign Military Arrangements Benefit Africa
January 29, 2018

The proliferation of foreign militaries in Africa has followed the growing commercial presence of those countries here, suggesting many are protecting their business interests

Peter Fabricius Correspondent

The AU should track foreign military arrangements on the continent to ensure they serve Africa’s interests. The United States in particular, but also France, have had a lot of flak for their military presence in Africa. However a surprising number of other foreign powers have quietly been putting boots on African soil over the past couple of decades, though attracting little attention.

Does the African Union (AU) endorse all this activity? Is it monitoring it? Is it concerned about it? And if not, should ordinary Africans be worried and demand action from the continental body? Alex Vines, head of the Africa programme at Chatham House, discerns a “growing diversification of security partners” on the continent.

“In 2000, security in Africa meant mostly France, a bit of the US and some niche deployments such as Morocco (as presidential guard) and the United Nations (UN),” Vines told ISS Today.

“We now have Djibouti hosting many military bases. China in 2017 joins other recent arrivals in Djibouti with military facilities. Japan too has its only foreign military base there as do the Italians. Troops from Germany and Spain are hosted by the French, but the Russians failed to negotiate a partnership with the Chinese to share their facilities. India is also considering opening its own base in Djibouti, as is Saudi Arabia.”

But it isn’t only Djibouti that’s accepting new foreign military bases, he says. “In February 2017, the United Arab Emirates (UAE) secured agreement for a foreign military base in Somaliland, following its opening of a military facility in Eritrea in 2015. Turkey opened a military training base in Somalia in 2017.”

And now Russia is believed to be negotiating with Sudan to host the base it couldn’t establish in Djibouti. India has facilities in Mauritius and Madagascar “and would like to deepen its Seychelles presence”, says Vines. This “diversification of security partners will continue in 2018”, he says. Meanwhile, the familiar players retain a strong presence.

“Obviously you also have the French, especially in the Sahel and Gabon and in its departments of Reunion and Mayotte,” Vines says, noting that France remains the key foreign military power in Africa. In 2017 the US marked a decade of Africom (US Africa Command) which stations some 4 000 troops at Camp Lemonnier in Djibouti, its only permanent base in Africa.

Under the Trump administration, Africom has increased military strikes against violent Islamist extremists — mainly al-Shabaab in Somalia, Islamic State in Libya, and the likes of al-Qaeda in the Islamic Maghreb (AQIM) in Niger. Why this growing foreign military presence in Africa?

“Africa’s insecurity is drawing in other nations,” Vines believes. Certainly that offers a plausible explanation for the presence of French, US and other European militaries that are largely focused on attacking violent Islamist extremists in West, North and East Africa.

But they are also pursuing their own interests, says Annette Leijenaar, head of the Peace Operations and Peacebuilding programme at the Institute for Security Studies (ISS). Indeed the proliferation of foreign militaries in Africa has followed the growing commercial presence of those countries here, suggesting many are protecting their business interests.

The growing presence of Middle East militaries in the Horn of Africa is more complex, Omar Mahmood, a researcher at the ISS in Addis Ababa, explains. Much of it has to do with the clash between Saudi Arabia, the UAE and Bahrain on the one side; and Qatar on the other.

The UAE’s Assab base in Eritrea, for example, is clearly part of its joint campaign with the Saudis against the Iran-backed Houthi rebels just across the Bab al-Mandab strait in Yemen.

Turkey is siding with Qatar in the big Gulf stand-off and its military base in Mogadishu — designed to train Somali soldiers — could well be connected with that—conflict as Somalia remains neutral in the stand-off. The UAE has also opened a base in Mogadishu.

Mahmood warns that African states are being sucked into Gulf conflicts as proxies, with few real national interests at stake. Leijenaar is one of many expressing concern that the US and France, the two big players, are advancing their own interests, including in their fight against global terror, rather than those of the host African nations.

These however are not necessarily mutually exclusive goals, Africom’s spokesperson Robyn Mack insists. She says its military strikes in Somalia and Libya are being conducted with the approval of the host governments, and in the interests of both the hosts and the US.

Whether the expanding foreign military presence amounts to the militarisation of responses to terrorism, or reflects the geopolitics of middle and superpowers in Africa, there will be implications for human security on the continent. And therefore the AU should be paying greater attention. But how much does it control, condone, or know about what foreign troops are doing in Africa?

Vines notes the AU is not in overall control of most of these activities, as most are done by bilateral agreement with host countries. There are efforts to try to replace some of these activities with African soldiers, but these are mostly regional initiatives as the AU’s African Peace and Security Architecture (APSA) is not functioning, Vines says.

Nevertheless the AU has endorsed regional initiatives, including the two largest — the G5 Sahel Joint Force and the Multinational Joint Task Force (MNJTF).

The G5 Sahel Joint Force is a partnership among Burkina Faso, Mali, Mauritania, Niger and Chad to fight al-Qaeda and the Islamic State. Both the AU and France, for different reasons, are hoping eventually to substitute it for France’s Operation Barkhane, allowing the French troops to leave.

The MNJTF, comprising Benin, Cameroon, Chad, Niger and Nigeria, is fighting Boko Haram in the Lake Chad region.

Yann Bedzigui, a researcher in the ISS Peace and Security Research Programme in Addis Ababa, says, “The issue of foreign military bases has been a source of concern for many member states of the Peace and Security Council (PSC). However it is a complicated issue. Hosting a foreign military base is a sovereign decision. Since the PSC and the AU in general have tended to emphasise sovereignty above all, its leverage is quite limited.”

But shouldn’t the AU PSC at least try to monitor such foreign military activity, to acquire an overall strategic picture of what is happening and ensure such foreign powers are not acting against Africa’s interests? No, Bedzigui says. “This is military intelligence. The AU does not have any mandate in this area.”

Leijenaar believes the AU would like to keep control of foreign military activity or at least play some coordinating role, and have an intelligence overview of all such military activities on the continent. “But they just don’t have the capacity to do that, for one thing,” she says.

She doubts Addis Ababa knows the scale of military expansion on the continent, for instance Somalia and Libya, “where just too many actors are busy executing their own agendas”. But mandates can change and, surely in this case, capacities could increase to reflect changing realities on the ground.

The AU should surely at least independently monitor such activities to ensure they do indeed serve Africa’s interests. In the long term, “Africans should be looking at how to build up their own security and facilities,” Vines says. Meanwhile, the AU should be keeping track of the diversifying military and security arrangements on the continent.

That should be the task of the AU’s PSC that’s mandated to keep the continent safe. At this week’s AU summit, a new PSC is to be elected. That should be high on its agenda.

— ISSAfrica.
EDITORIAL COMMENT: Corruption Fight in Sync with AU Theme
January 30, 2018
Zimbabwe Herald

AT the opening ceremony of the 30th Assembly of Heads of State and Government of the African Union (AU) two days ago, the theme for 2018; “Winning the Fight Against Corruption: A Sustainable Path to Africa’s Transformation”, was unveiled.

President Muhammadu Buhari of Nigeria officially launched the theme and had some nuggets of wisdom which should resonate with African countries, including Zimbabwe. He said corruption was “one of the greatest evils of our time”.

“Corruption rewards those who do not play by the rules and also creates a system of distortion and diversion thereby destroying all efforts at constructive, just and fair governance,” he explained.

Corruption is indeed evil and is variably described as a cancer that has gnawed at the social fabric and development of Africa. There have been cases when Africa has been made a synonym of corruption and some countries have been described as “fantastically corrupt”.

Corruption in Africa is real while countries may simply lose out because of the perception that African countries and leaders are corrupt hence the need for investors to shun certain destinations.

As President Buhari puts it, corruption distorts systems and skews the playground towards well-connected individuals and often criminal gangs who go on and amass massive wealth for themselves.

This corruption, sustained by bribery, extortion, kickbacks, graft, racketeering, name-dropping, among other evil modalities, replicates itself in a vicious cycle. What is worrying is that money gets diverted and not used for purposes for which they have been budgeted for.

We have seen projects suffer stillbirth because money intended for their completion would have been diverted. We have also seen shoddy and half-baked projects not commensurate with funds availed.

Some investors have taken flight because of demand for kickbacks by unscrupulous individuals near levers of power. On the main, corrupt individuals have lived luxurious lives at the expense of the majority; at the cost of lives, in some instances. One can imagine a shortage of drugs at a hospital because a tender to provide some machinery or buy some medicines have been diverted.

It is that serious.

We applaud President Mnangagwa’s administration for fighting corruption and declaring zero tolerance to the practice. The President should stand firm and as the Chinese would put it, catch the tigers and the flies.

There should be no sacred cows and all criminals should go to jail. There have been worries by citizens that there are still corrupt individuals even in the new administration.

With President Mnangagwa’s zero tolerance to corruption, we can only predict that soon the long arm of the law will catch up. Fighting corruption will instil confidence in investors and lenders because it will be known that every penny will be committed to intended use.

The elimination of corruption boosts the ease of doing business. It is a scenario that Zimbabwe needs at the moment. A Zimbabwe that is “open for business” should be corruption-free.

And President Mnangagwa in enforcing a clean, transparent and efficient culture will also be conforming to the African Union Convention on Preventing and Combating Corruption (AUCPCC) which has not been enforced for the past 15 years. Zimbabwe could actually lead the way.
Zimbabwe Banks Scrap Tax on Transactions Below $10
January 30, 2018
Livingstone Marufu
Herald Reporter—

GOVERNMENT has, with immediate effect, directed banks not to levy 5 percent tax on all transactions below $10 as a way of promoting financial inclusion. This comes as Government moves to provide safety nets to cushion vulnerable people and allow them to transact freely. Banks heeded Government’s call to remove the $0, 05 tax on transactions below $10. In a gazette last week, the Government said: “The Amendment of section 22B of Chap 23:04, ‘automated financial transactions tax’ of the Finance Act [Chapter 23: 04] is amended by the deletion of “for each transaction on which the tax is payable” and the substitution of “for each transaction exceeding Ten United States dollars on which the tax is payable.”

“Section 22G (Intermediated money transfer tax) of the Finance Act [Chapter 23:04] is amended by the deletion of “for each transaction on which the tax is payable and the transaction is exceeding Ten United States dollars on which the tax is payable.”

Steward Bank CEO, Dr Lance Mambondiani, told The Herald that the removal of the 5 cents tax will go a long way in promoting financial inclusion. “For a long time, we have been in negotiations with the Government to scrap that 5 cents tax for any amount less than $10 and finally the authorities had paid heed to our appeals. This will certainly make waves in promoting financial inclusion as banking products are becoming more and cheaper to our people.

“This may be the other way of encouraging the unbanked public to start banking as this beat all mobile payments platforms, which charge a certain fee for every transaction made. As time goes on, this will make those who do not want bank accounts to have one.”

Meanwhile, the Reserve Bank of Zimbabwe (RBZ) has since slashed bank cash withdrawal charges following an outcry from members of the public. The new charges were put at 1 percent of an amount withdrawn at an Automated Teller Machine (ATM) and 1.25 percent for withdrawals over the counter.

Against this background and as part of ongoing efforts to promote financial inclusion and to ensure that banking products and services are affordable to the banking public, RBZ reviewed cash withdrawal charges downwards. RBZ continued to monitor the cost of bank charges to ensure access to affordable banking services and at the same time promoting the use of plastic money.
Zimbabwe Retailers Pledge to Continue Slashing Prices
January 30, 2018
Denford Mutashu
Zimbabwe Herald

Retailers yesterday pledged to continue reviewing down prices of basic commodities as long as cost drivers are reduced and applauded Government for coming up with a value chain price stabilisation mechanism. Government last week reduced excise duty on petrol and diesel by 6,5 cents and 7 cents, respectively. The intervention by Government was expected to stabilise prices of basic commodities and is already bearing fruit.

High production cost structures were being partly attributed to high fuel prices. The reduction in fuel prices also contributed significantly to the cost of doing business. Confederation of Zimbabwe Retailers president Mr Denford Mutashu said: “We are part of an engagement process which is being coordinated by Government on price stabilisation. We have pledged and we will continue to reduce prices as long as cost drivers are reduced. There is no reason for us to keep prices when we are getting them at lower prices.”

Mr Mutashu applauded the Government for taking measures to stabilise prices and the economy at large. “If you check, for instance, the price of beef has gone down to about $3,90 a kg. We applaud the Government for coming up with a value chain price stabilisation approach and we will continue to work with Government to ensure prices further go down. What we get from manufacturers is what we also pass to the consumer.

“What we are also saying is that there is now too much money on the market chasing few goods, so we need to increase local production. At the moment, the money in Real Time Gross Settlements (RTGs) form is not matching the level of production in the country.” Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe last week said the overall consumer price index was inclined to fall further.

“The private sector business community acknowledges and welcomes the recent Government interventions to reduce excise duty on petrol and diesel. Out of the 15 monitored basic commodities, prices of economy beef for example are expected to fall by an average 10 percent to 20 percent.” Already, the price of beef has fallen from around $9.80 a kg to $4, 99 per kg in some supermarkets in Harare.

An economist, Mr Kingstone Kanyile, concurred with Mr Jabangwe last night saying the reduction in excise duty on fuel by Government was a good move. “The marginal tax reduction serve as an indicator that this administration is serious about improving the cost and ease of doing business. Although insignificant they are welcome. Perhaps we will see further tariff being lowered. So far we are happy. So far the indicators are positive.”
Zimbabwe Government Seeks Diamond Sector Investors
January 30, 2018
Ishemunyoro Chingwere
Business Reporter
Zimbabwe Herald

THE Zimbabwe Consolidated Diamond Company is working on a structure to lure private investors back into the diamond mining industry after Government ordered companies that have been operating in Marange to vacate in 2016, as their licenses had expired

Government is working on amendments to the Indigenisation and Economic Empowerment Act to limit the 51 /49 percent shareholding requirement to only two minerals, diamonds and platinum. The Government in 2015 did not renew licences of private players in the diamond mining industry after realising that the Treasury had not accrued meaningful revenues from the industry. ZCDC was subsequently issued with exclusive mining rights in Marange. A source with the knowledge of the matter said ZCDC was working on a structure to attract investment.

“The Government wants partners to help fully exploit the potential in the diamond industry just like in all other sectors of the economy but the difference here is we want legislative protection to retain control as highlighted by Minister (of Finance and Economic Planning Patrick) Chinamasa,” said the source who declined to be named.

“Government has already invested extensively in diamonds through the RBZ (Reserve Bank of Zimbabwe) which last year pumped $80 million into the ZCDC operations and Government’s desire is for all this to be taken care of in the envisaged partnerships.”

Zimbabwe is this year expected to produce three million carats of diamonds up from 1,8 million carats last year, according to Mines and Mining Development Minister Winston Chitando. In 2016, ZCDC produced 961 000 carats which increased to 1,8 million carats in 2017, he said. At peak in 2012, Zimbabwe’s diamond sector produced 12 million carats. Meanwhile ZCDC has dismissed reports that new diamond deposits have been discovered in Chiredzi.

Hundreds of illegal miners descended on Chiredzi following reports that some panners had picked diamonds in the area. “ZCDC being a mandated diamond mining company in Zimbabwe sent a team of Geologists to investigate whether they are real diamonds and to assess the potential of the geology of the area to host diamonds,” said Dr Mpofu.

“The stones are not diamonds but quartz ranging from clear, milky quartz with iron stains to smoky quartz. The quartz averaged 10mm in size, the dolerite on the surface has a honeycomb structure with quartz growth inside. The geological formation of the area is not kimberlitic but amygdaloidal basalt or dolerite which do not host diamonds,” he said.
African Union First Ladies Vows to Keep Up HIV, Aids Fight
January 30, 2018

First Lady Auxillia Mnangagwa mingles with other first ladies at the Organisation of African First Ladies against HIV/AIDS meeting at African Union Building in Addis Ababa, Ethiopia, yesterday. — (See story on Page 2). — (Picture by Presidential Photographer Joseph Nyadzayo)

Happiness Zengeni in ADDIS ABABA, Ethiopia
Zimbabwe Herald

First Lady Auxillia Mnangagwa yesterday vowed to lead Zimbabwe’s fight against HIV and Aids through dolling out mobile clinics across the country and intensifying awareness campaigns.

Speaking on the occasion of the 20th Organisation of African First Ladies against HIV and AIDS (OAFLA) Ordinary General Assembly in Addis Ababa, Ethiopia, the First Lady said Zimbabwe had registered tremendous progress in the fight against HIV.

The meeting ran from January 25 to 29 and came as African Heads of States also met in Addis Ababa for the Ordinary Session of the Assembly of the Heads of State and Government of the African Union on January 28 and 29. President Mnangagwa attended the AU meeting of Heads of States.

“Personally, I undertake to champion the fight by going out there to the remote and disadvantaged areas with mobile clinics to improve access to health services,” said the First Lady. “I will also scale up awareness campaigns through mobilisation of critical stakeholders who include traditional leaders, the Chiefs and church organisations. These will assist in conscientising communities on child marriages, child abuse and child survival.”

This was her maiden appearance at the prestigious event after President Mnangagwa came into office in November last year. “I must emphasise that although I am new in my capacity as the First Lady of Zimbabwe, I am not new to issues around HIV and AIDS, maternal child mortality and empowerment of women,” she said.

“I am a Member of Parliament of a constituency for four years now, championing the transformation of the most vulnerable groups in our society.” Some of the initiatives she has spearheaded include coming up with women’s banks in her constituency, encouraging women to own livestock and raise school fees for their children and encouraging women to give birth in hospitals. She has also led building of shelters for pregnant women to be closer to hospitals when they are due to avoid complications, especially for the new young married women, gender equality programmes, abolishment of child marriages, pushing for strict jail terms for abuse of minors and rape and provision of safe sanitary wear for young girls.
EU, AU Pledge to Support Zimbabwe
January 30, 2018
Zimbabwe Herald
Happiness Zengeni in Addis Ababa, Ethiopia—

The European Union (EU) and African Union (AU) have both pledged unwavering support to President Mnangagwa’s Government in its efforts to reintegrate Zimbabwe into the international community and reforms to place the economy on a growth trajectory. AU chairperson Mr Moussa Faki Mahamat will visit Zimbabwe soon to assess how the AU can support the country in its preparations for harmonised elections, to be held by June this year and renewed efforts to have illegal sanctions imposed by the West lifted.

Foreign Affairs and International Trade Minister Lieutenant-General Minister Sibusiso Moyo (Retired) said here yesterday at the conclusion of the 3oth Ordinary Session of the AU Assembly. It was President Mnangagwa’s inaugural participation in the assembly since he assumed office in November last year.

The President briefed the summit on the peaceful transition in Zimbabwe. He said AU Commissioner for Peace and Security, Ambassador Smail Chergui, singled out Zimbabwe among African countries with strong institutions, saying that if all countries on the continent had institutions of similar nature and calibre, there would be less problems.

“In response to the submission by His Excellence, the Commissioner for Peace and Security categorically stated and praised three countries for having very strong institutions, which demonstrated that if all the African countries can have institutions of that nature and calibre, there will be fewer problems in Africa.

“Those countries are Zimbabwe, Kenya and Liberia. Zimbabwe for its (peaceful) transition, Liberia for its elections and Kenya for strong institutions, which governed a situation which was going out of hand,” he said.

In his submission at the AU summit held under the theme “Winning the Fight Against Corruption: Sustainable Path Towards Africa’s Transformation”, President Mnangagwa assured African leaders that Zimbabwe’s founding father and former President Mugabe, also Africa’s icon, was well and Government had guaranteed safety and wellness.

“In his intervention on institutional reform of the AU, His Excellency, the President underscored the need for a sustainable inclusive and transparent reform process,” the minister said. The President also pledged support to ongoing consultations regarding plans to establish the Free Trade Area to be launched at the AU’s extraordinary summit.

At the summit, Zimbabwe was elected to Peace and Security Council of the African Union for the period 2018-2020. The country and other members will thus be active in the search for solutions to conflicts on the continent. The President held a series of meetings with his colleagues, heads of State and Government on the summit agenda and pursuit of a new economic thrust for Zimbabwe.

Minister Moyo said the President’s message was consistent and clear that “Zimbabwe is open for business” and that the forthcoming elections would be free and fair. Further, he said that President Mnangagwa held fruitful discussions with European Union commissioner for development Neven Mimica who is also scheduled to visit Zimbabwe in April to see how EU can help in ongoing reforms.

“A new era is opening up, and the EU will support ongoing reforms and efforts. I am looking forward to visiting the country in April,” he said. Minister Moyo said Mr Mimica expressed the EU’s strong desire to engage President Mnangagwa’s administration as well as to ramp up support for economic development from the EU’s perspective.

“It is in this context that the EU commissioner for development proposed that he wanted to visit Zimbabwe and he will come together with the commissioner for peace and security to support and show solidarity with the new administration,” he said. The minister said that the visit is meant to provide confidence to investors and for the international community to lift sanctions on Zimbabwe.

President Mnangagwa has already pronounced his Government’s position that it will seek to reengage with and reintegrate Zimbabwe into the international community to end nearly two decades of isolation. The president took the opportunity and his time in Ethiopia to meet Zimbabweans living in Addis Ababa and invited them to contribute towards economic revival of the country.

In his acceptance speech new AU chairperson and Rwanda President Paul Kagame, who took over from Guinea’s President Alpha Conde, said Africa could fight corruption through improvements in education.

He also emphasized the importance of observing the rule of law and imposing stiffer penalties. He said corruption was not limited to Africa, but that it was a global phenomenon.
President Mnangagwa Back from Ethiopia
January 30, 2018
Zimbabwe Herald

PRESIDENT Mnangagwa addresses journalists at Robert Mugabe International Airport soon after landing from Addis Ababa, Ethiopia, where he attended the 30th Ordinary Session of the African Union General Assembly.

Tobias Mudzingwa

President Mnangagwa arrived back home this afternoon from Addis Ababa, Ethiopia, where he attended the 30th Ordinary Session of the African Union General Assembly.

The president was welcomed at Robert Gabriel Mugabe International Airport by Vice Presidents Constantino Chiwenga and Kembo Mohadi and other senior Government officials. Before the AU summit, President Mnangagwa attended the World Economic Forum in Davos, Switzerland.

Speaking to journalists after his arrival, President Mnangagwa described the trip to Davos as a success, saying most delegations congratulated Zimbabwe for a peaceful political transition in 2017. He also said relations between Zimbabwe and Britain were set to improve as a British envoy is expected in the country next week.

Speaking on his maiden appearance at the African Union summit, President Mnangagwa said he was pleased with the way he was received in Addis Ababa, where he reiterated that Zimbabwe was open for business. He also said the country was determined to fight the scourge of corruption.
ED Charms Global Investors
January 30, 2018

Happiness Zengeni, recently in Zurich, Switzerland
Zimbabwe Herald

PRESIDENT Mnangagwa last Thursday met several high profile business people in Zurich, Switzerland, and took the opportunity to apprise them of Zimbabwe’s compelling business and investment story.

The meeting in Zurich, his last engagement after attending the 48th edition of the World Economic Forum, was attended by an array of reputable global investors who were keen to hear, first hand, the President pronounce his vision for a new Zimbabwe after years of pariah status.

President Mnangagwa’s attendance of the WEF was the first time that the country has ever been represented by a Head of State. Investors at the meeting were keenly interested in knowing the abundant investment opportunities Zimbabwe presented and what the Government was doing to support investors willing to invest in the country.

Among the top global investors who attended the Zurich meeting was global investor, Mr Urs Schwarzenbach, a UK-based Swiss billionaire and financier whose fortune is estimated between $1,5 billion and $2 billion.

Mr Shwarzenbach owns real estate in Switzerland, Scotland, Australia and Morocco among other jurisdictions and since 2001; he has owned the majority of shares of the Zurich luxurious Dolder Grand Hotel.

Also present was Mrs Sabine Dall’Omo, chief executive officer of Siemens. Mrs Dall’Omo also serves as Siemens’ member of the managing board and she has previously served in the company as chief finance officer. She also once was Siemens Africa chief financial officer.

Swiss Re’s Bruce Hodkinson, managing director capital solutions attended the meeting as did Turtle Management senior advisor to the chairman Mr Gunther Vogler.

Glencore Global Head of Oil, Alex Beard, Lonrho Group chief operations officer Bruno Sidler, Swiss Re managing director Bruce Hodkinson, ABB head of Global Relations Tobias Becker and Swiss Africa Business Circle managing director Michael Rheinegger were also among the delegates.

In an interview after the meeting renowned Zimbabwean banker Professor Mthuli Ncube said the country was reengaging the world at the right time. Prof Ncube’s Quantum Global sponsored the meeting.

Prof Ncube is the head of Quantum Global, an investment firm focusing on Africa, research arm. He said the country was reintegrating into global community when the global economy was on an upward trend, especially on commodities. Zimbabwe produces gold and platinum among other key minerals. Prof Ncube said that Zimbabwe had educated people, attribute investors also considered before making the decision to move into a country.

“So as Quantum Global Group we are keen to invest into mining, gold sector in fact all mining activities. We have interests in the forestry sector; we would like to invest in forestry and forestry beneficiation.” He said through his company, they were also interested in the entire soya bean value chain, infrastructure and tourism.

“We also want to invest in infrastructure; we have a lot of experience in building courts and power station; we want to see if we can do something on that area.

“We hear the right sounds from the Government’s side and we will come to look and see what we can do on that side. But it’s important for Zimbabwe to reengage the international community and I hope this is the beginning. However, Dr Ncube said there was need to deal with issues of currency and the liquidity situation,” said Dr Ncube.

Sunday, January 28, 2018

Zimbabwe Shines Brightest in Davos
Livingstone Marufu
Zimbabwe Sunday Mail

President Mnangagwa’s high-level meetings with top leaders from the world’s multilateral financial institutions and rich nations in Davos — Switzerland, has rekindled high hopes that the country’s re-engagement with the international community can yield quick economic turnaround.

Great expectations came after President Mnangagwa was welcomed by International Monetary Fund (IMF), World Bank (WB) and African Development Bank (AfDB) top officials who are key in making decisions that might unlock funding for the country.

During the World Economic Forum, all eyes were on Zimbabwe and many investors were anxious to see how it will move forward after 37 years of former President Mugabe’s leadership.

And true to his words, President Mnangagwa is serious about re-engaging the international community and opening new doors for investment. Most nations’ leaders and multilateral chiefs have expressed their desire to work with Zimbabwe.

Economists and captains of industries have welcomed the development and see the Davos trip as a stepping stone for the country in terms of achieving economic revival.

Confederation of Zimbabwe Industries (CZI) president Mr Sifelani Jabangwe said the President’s trip has brought a lot of interest across the globe and this may help revive the country’s industry.

“We are very happy that for the first time multilateral institutions like World Bank and IMF have opened up to extend credit lines to Zimbabwe, which is an encouraging development. Zimbabwe needs a great deal of investment towards manufacturing industry to re-tool and re-equip as most of our machinery are now obsolete.

“The bail outs by world major lenders will help the country to start producing again so that we start exporting goods and services, which we had ceased a long time ago. Once companies like NRZ and Zisco Steel are back on track, revival is almost certain,” said Mr Jabangwe.

President Mnangagwa held talks with IMF managing director Christine Lagarde, who said the financial institution will continue supporting Zimbabwe as the country addresses its economic challenges.

In a statement last Thursday, the IMF said Lagarde welcomed President Mnangagwa’s commitment to stabilising the Zimbabwean economy.

Madam Lagarde commended the President’s efforts to work towards normalising the country’s re-engagement with the international community at World Economic Forum in Davos.

President Mnangagwa also met AfDB president Dr Akinumwi Adesina, with the AfDB boss saying the meeting was excellent. The two discussed several areas of importance, which include agriculture, mining and infrastructure development.

Confederation of Zimbabwe Retailers Marketing and Stakeholders Relations director Mr Alious Burutsa said Zimbabwe’s visit will be key in bringing back investors’ confidence in the country.

“As a country, we are happy that His Excellency President Mnangagwa has held a number of high level meetings with the top executives, that will re-build investors’ confidence in the country.

“The country has had a very low foreign direct investment and low lines of credit but with the new dispensation inspiring such confidence across the world, the country will be flooded with investors.

“The President has already told them the potential investment areas and we have a lot of opportunities in agriculture, mining and infrastructure development.

“The new dispensation’s confidence will cascade down to other nations who might be interested in investing in the country.

“The country needs some investment in agriculture, mining and infrastructure development,” said Mr Burutsa.

Due to revived optimism generated by President Mnangagwa’s presidency, the country has witnessed foreign direct investment inflows in just over 60 days with him in office.

Even erstwhile colonisers and foes like Britain and America have revived their long time interests in working with Harare.

Britain in December sent 27 tour operators, while Spain sent seven to scout for opportunities.

Prominent economist Dr Gift Mugano weighed in: “For the first time in years we have managed to successfully manage to market our country economically.

“Serious investors are currently looking for opportunities to invest in Zimbabwe.

‘‘We are fishing in the actual pond as our leaders had the opportunity to talk to the investors directly.

“The President went to Davos with key economic ministers like Dr Mike Bimha (Industry and Commerce), Minister Chinamasa (Finance and Economic Planning) and Minister Chitando (Mines and Mining Development), among others.

“We need investors to come and add more value to our agro products to bring more value to the country.

“Mining, electricity generation and special economic zones are other areas which we expect more investments to take place.”