Africa Research

Bulletin Economic,
Financial and
Technical Series

Volume 34 Number 11 November 16th–December 15th 1997 Published January 8th 1998

The Commercial Farmers’ Union, rep-

ZIMBABWE resenting some 4,000 white landowners,
Land Acquisition said annual production valued at Z$14bn
The government released an official list on
($100m) could fall 37% “at a conserva-
tive estimate.”
In this issue . . .
November 28th of 1,503 mostly white-
owned farms it plans to nationalise and Political and economic analysts said the Francophone Movement
hand over to landless black peasants. confiscation drive has severely undermined Hanoi Summit 13246
the southern African state’s investment
Farmers’ leaders immediately warned that image, and would probably damage its Angola
confiscation of the properties, totalling fragile economy and its chances of secur-
nearly 12m acres (4.8m hectares), was Huge Potential 13249
ing crucial aid from Western donors.
likely to cut commercial farm production Egypt
in the agriculture-based economy by at But President Robert Mugabe said on Nov-
ember 27th that he would press ahead with Massacre Hits Tourism 13251
least a third.
the land reform programme because it was Liberia
crucial to achieving social justice.
Bright Future 13252
One quarter of the 4,000-acre farm of Ian
Smith, the nation’s last white leader, will Mozambique
be seized, according to the list. Mr Smith 1998 Budget 13255
headed the white government of Rhodesia,
as Zimbabwe was known before indepen- Togo
dence in 1980. On The Way Up 13253
The list names 10 farms owned by the Infrastructure 13261
South African Oppenheimer family, foun-
ders of the giant farming and mining con-
glomerate with interests spanning southern
Africa, Anglo American Corp. Contents
Some of the biggest, most renowned white
ranching and farming families running the 1 Continental Developments 13245
most productive farms were also named,
the union said. 2 Policy and Practice 13249
The list reveals 83 black farmers are 3 Communications
among those whose land is targeted for and Transport 13260
takeover. None appeared to be ranking
members of President Robert Mugabe’s 4 Commodities 13263
ruling party. 5 Industries 13270
Mr Mugabe has vowed not to pay compen- 6 Economic Aid 13273
sation to landowners unless Western
donors provide funds, but the government Rates 13273
would pay for buildings and improvements
on seized properties, beginning within the Index 13274
next few weeks.
(New African Yearbook) The head of the farmers’ union, Nick

Published monthly since 1964 ISSN 0001 9852

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13244 – Africa Research Bulletin

Swanepoel, appealed to Mr Mugabe for Initially, white farmers dismissed Muga-

further talks to devise a land reform plan be’s plans, announced in mid-October, for
that would sustain productivity and the government to acquire more than 5m
employment, the union said. hectares for resettlement as mere poli-
President Mugabe was expected to receive ticking, with ZANU-PF trying to regain its
a hero’s welcome in response to his land lost support. But they started to take the
acquisition programme when the congress plan more seriously when Mugabe said
of the ruling Zanu-PF party opened in the “Forget what the constitution says. If it
eastern border city of Mutare on does not indicate that we can take the land
December 3rd. then it will be changed and people will just
have to take the land.” He added: “We are
Although Zimbabwe’s financial markets going to take the land and we are not going
prepared for continuing economic turbu- to pay for the soil. However, if Britain
lence in the wake of the announcement of wanted compensation they should give us
plans to seize 1,503 mostly white-owned the money and we would pass it on to their
farms, congress delegates were certain to children.” In the past Britain has backed
endorse Mr Mugabe’s move. land redistribution schemes, but on Nov-
Businessmen and investors expected Mr ember 7th the British government reaf-
Mugabe to give details of the timetable, firmed that no money would be provided
what kind of compensation it will pay for except for sales by willing sellers to wil-
the land and how this will be financed. ling buyers.
But at a news conference on December 1st The government says it wants 1,503 farms.
by Kumbirai Kangai, Agriculture Minister, Designation, even though subject to appeal
there was little evidence of an agreed strat- in the courts, suspends the owners’ title to
egy covering the next stage of the resettle- the land, cancelling their right to sell it or
ment programme. Farmers would be borrow money against its value. Moreover,
allowed to reap already planted crops, he they noted that the government had allo- (FT 18/11)
said, but the first group of farmers to be cated only Z$80m for the proramme over
dispossessed would be forced to leave their the next year, and concluded that the said, adding that individual and other non-
land by August 1998. (HT 29/11, FT 3/12) government could not afford to compen- resident corporate FCA’s holders would
sate them for buildings and equipment, let not be affected by these measures, which
Political Imperative alone for the land itself. Some rushed to are expected to raise Z$3.8bn for the
Africa Confidential felt that the timing of convert their savings into hard currency. government.
the announcement of Mugabe’s compul- Many tobacco growers decided to keep last “These measures alone will, however, be
sory acquisition could hardly have come at season’s earnings in overseas accounts. All insufficient to restore order on the foreign
a worse time. As the currency came under this helped precipitate the Zimbabwe dol- exchange market, where we witnessed
attack (falling against the United States’ lar’s slump. speculative trade of the Zimbabwe dollar
dollar from Z$14 to Z$25 in mid- This worries foreign investors who ques- leading to the crisis,” said Mr Murerwa.
November) and with even the robust stock tion the security from government take-
market losing value, Mugabe’s determi- On November 14th the Reserve Bank had
over of other private holdings, if farm land to intervene with cash injections to save
nation to press ahead with acquiring 1,500 is not secure. Government officials insist
farms gave investors the jitters. the country’s currency from losing value
land is a special case, rooted in history, but against major world currencies. The Zim-
Land is the most emotive issue in Zim- that does little to mollify the investors. babwe dollar traded between 19 and 25 to
babwe politics. Under the old white (AC 5/12) the US dollar, and up to 45 to the British
regime, the better half of all Zimbabwe’s pound. Previously it fluctuated between 10
land was reserved for white “commercial” Measures to Cushion Dollar and 12 to the US dollar.
farmers, served by irrigation schemes, The Zimbabwean government on Nov-
good roads and power. The rest was left The Bank’s quick action left the rates at
ember 17th announced a series of meas- between 14 and 18 Zimbabwe dollars to
over for African traditional smallholders ures to cushion the Zimbabwe dollar from
and cattle-herders. This gross injustice was the US dollar, and between 24 and 30 to
speculative trading which caused the the pound sterling.
the main economic issue of the liberation nation’s currency to plummet to an all-
war. President Mugabe’s victorious time-low on November 14th. Mr Murerwa said the reasons for the cur-
ZANU-PF movement promised to rectify rency’s decline were varied. “The balance
it, starting by resettling 162,000 families in Finance Minister Herbert Murerwa said the of payments position has not been satisfac-
five years. That was in 1980, at Indepen- government had raised the re-discount rate tory . . . exports have performed poorly,
dence. Since then only 70,000 families (borrowing rate for banks) from 25.5% to particularly tobacco and gold,” he said.
have been resettled. Much of the land real- 28.5%, and that the position would be
located to black owners has gone not to the reviewed with a further upward adjustment The price of gold, which accounts for
poor but to prominent ZANU-PF people. if speculation on the money market con- about 40% of Zimbabwe’s export receipts,
Breaking up the commercial farms without tinued. has dropped from an average of 380 US
substantial new investment would be risky. Also, funds from Corporate Foreign Cur- dollars per ounce to under $320 over the
It could also encourage a spate of land rency Accounts (FCA’s) would no longer past few months.
invasions by frustrated and impoverished be sold on the foreign exchange market to The emergency austerity package of
Zimbabweans. curtail speculative trading, Mr Murerwa spending cuts, tax increases and foreign-
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November 16th–December 15th 1997 Africa Research Bulletin – 13245

exchange controls was intended to finance Tafa, executive director of Chibuku veterans demanding compensation, esti-
the veterans’ payments, stabilise the Zim- Regional Investments, a Mozambique mated to cost Z$4bn and fears of ill effects
babwe dollar and persuade the IMF to brewing company. from the El Nino weather phenomenon all
resume the balance-of-payments loans. Justifying the move, Mr Murerwa said hit the Zimbabwe Stock Exchange.
It was unclear whether the measures would companies had been abusing the accounts
reassure investors, however. Many econ- to speculate against the local currency The upbeat report (p. 13224) has been
omists say the government can ill afford rather than to finance genuine business superceded by the country’s “worse ever
the payments with the budget deficit transactions. “This is a time for nation- financial crisis.” In three days the ZSE lost
already soaring. Moreover, a decision building, not speculation on the currency,” 17% of its value.
announced on November 18th requiring he said.
companies to close about $160m of Mr Murerwa’s austerity package, designed From a high of about 12,000 points in
foreign-currency accounts worried many to reduce the deficit by $3.8bn this year, August, when the market had risen by 20%
executives, who said the accounts were also included a freeze on $1.1bn of spend- since January, it has dropped by 40% to
vital to financing trade and encouraging ing, stepped-up tax-collection efforts and a the 8,300 mark. The free fall had stabilised
investment. The move requires companies strong hint of new tax increases. (EA 24/11, by end-November, but may still have
to sell their dollars, rand and other HT 20/11) further to go. Shares are so cheap by his-
foreign currencies. torical benchmarks that there are once
Investor Jitters again some willing buyers—a few days
“It will make investors who are seeking The plan to redistribute land, the exchange previously it was almost impossible to sell
export earnings think twice,” said Bernard crisis, the government capitulation to war stock. (AA 28/11)

transfer of technology while encouraging

1 Continental Developments
regional transfer of skills and technological
growth. Member states were advised to
diversify their economic activities by mov-
ing away from traditional exports in order
for their products to be competitive on the
ECONOMIC GROUPINGS EAST AFRICAN international market. The communique
noted that regional integration and econ-
COMESA COOPERATION omic growth would heavily depend on the
“The Way Forward” development of physical infrastructure
Council of Ministers Meeting such as road, railway, and water transport
In their ongoing effort to transform the to promote the free flow of people, goods,
At the fourth meeting of the Common entire East African region into a single services and capital.
Market for Eastern and Southern Africa investment unit, investment authorities in
(COMESA) Council of Ministers in the three sister states organised a two-day Some of the challenges that face the region
Lusaka (Zambia) on November 24th, conference that ended in Nairobi on Nov- include uneven performance of the econ-
Chairman and Zambian President Freder- ember 22nd with a strong set of rec- omies of the three states; failure to fully
ick Chiluba appealed to the membership to ommendations and resolutions dubbed harness (and utilise) the available human
complement their economic efforts by “The Way Forward,” in which the regional and natural resources; competition for aid
attracting foreign direct investment into the governments are urged to let the private and investments; and the adverse effects of
region. He said without this countries in sector lead the way towards regional econ- globalisation on the local economies.
the common market would find it difficult omic co-operation by enacting a common However, there have been achievements
to convert their huge resources into wealth. investment code, mobilising the region’s which merited the attention of the confer-
vast resources for investment and the cre- ence: progress toward harmonisation of
Chiluba urged member-states to translate ating of awareness among the people about tariffs to facilitate free trade and the
into action, at the national level, all pro- the available trade and investment opport- achievement of common market objectives
grammes adopted by the community. unities. while the same was happening in the area
In a joint communique, reported by the of monetary, fiscal trade and investment
In another development, the Eastern and Weekly Review, it was also resolved that a policies. It was noted that the currencies of
Southern Africa Business Organisation common industrial strategy, spearheaded the three states were now partially convert-
asked Comesa to lift the economic by the private sector, be drawn up, and that ible. One area of notable achievement was
embargo on Burundi, following the coup tariffs be harmonised to enable the com- the signing of an agreement to eliminate
in that country. The organisation’s Chair- mon market to be integrated into the global double taxation, while other policies had
man, Boney Katatumba, said while COM- economy and trade. The regional auth- been put in place aimed at facilitating free
ESA countries had stopped trading with orities were asked to put into place pro- movement of goods, people, capital and
Burundi, businessmen from developed market economic reforms, promote private services such as the removal of road
economies of the West, the Far East, and sector led growth and economic liberalis- blocks, the launching of the East African
even South Africa have moved to fill the ation and to prepare the regional economy passport and the re-introduction of the
void. (PANA 24/11; BBC Mon.) Telecom for the challenges of the 21st century by inter-state passes. Plans are also underway
Investment p. 13087, Executive Secretary Dis- improving conditions that will lead to to establish an East Africa Stock Exchange
missed p. 12992 more foreign direct investments and the and to improve aviation and telecommuni-
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13246 – Africa Research Bulletin Continental Developments

cations links. In this regard, the East socialist Roger Dehaybe as Director-Gen-
African Co-operation Digital Transmission Development and Support eral of the Francophonie Agency which
system is to start operations soon. (WR The Francophone movement wants to succeeds the existing Cultural and Techni-
28/11) EAC Meeting Recommendations focus specific attention on the cal Cooperation Agency (ACCT). Paris
p. 13139 following areas: unsuccessfully opposed Dehaybe, fearing
i) support for development of he would be too independent. The new
private enterprise in countries of agency will answer to a board chaired by
FRANCOPHONE MOVEMENT the South through creation and Boutros-Ghali.
Hanoi Summit development of Small and
Medium-Sized Companies and The promotion of economic development
With the focus an economic one for the Small and Medium-Sized is seen as vital. The new charter says: “It
first time, the seventh Francophone Sum- Industries (SMCs and SMIs); is through the development and economic
mit held in Hanoi (Vietnam) from Nov- ii) development of national capacities take-off of francophone countries that the
ember 14th–16th reaffirmed the determi- for integration into the global
economy with a strengthening of Francophonie will assert itself in the
nation of the heads of state and the legislative framework; world.”
government of Francophone countries to iii) support for the process of
mobilise energies and resources at national The charter stresses the need to pursue the
regional economic integration important challenge of information tech-
and international levels to implement pro- within existing economic
grammes. It stressed the need for public organisations to boost the nology, an area where the French language
aid to development to be maintained at suf- competitiveness of economic and suffers a disadvantage because of the pre-
ficient levels. financial activities in member dominance of English in computer pro-
countries and encourage the gramming and cyberspace. (AFP 10/11, Frt
The summit was attended by representa- development of intra-regional 25/11, Gem 25/11) Trade War Looms
tives from 49 states or Francophone prov- trade and the coherence of macro- p. 12882
inces. Until now confined to former mem- economic policies;
bers of the French empire or to minority iv) technical and professional training
communities in North America or Europe, aimed at encouraging the SADC
the Francophone movement hopes, with a establishment of a proper
francophone economic network; Summit on Trade and
new image, to open up to countries where v) promotion of social justice and Investment
French is far from being the most widely- the taking into account of the
spoken language. human dimension to improve Presidents Ketumile Masire of Botswana,
Francophone countries, according to people’s living and working Robert Mugabe of Zimbabwe, Joaquim
movement sources, account for 18% of conditions. Chissano of Mozambique and the Prime
global trade and it was in this context that To ensure implementation of these Minister of Namibia, Hage Geingob took
Nigeria, the English-speaking economic proposals, a conference of Francophone part in the Southern Africa Trade and
powerhouse of West Africa, was invited to Economy ministers will take place Investment summit on the future of the
Hanoi. Nigeria recently announced its during the period 1998–99 in order to Southern African Development Com-
establish an action plan based on the munity (SADC) in Gaborone (Botswana),
intention to develop the study and spread concept of a Francophone economic
of the French language within the country. the third of its type to be held following
cooperation entity. ones in Johannesburg (1995) and Harare
The francophone family is also hoping to (Frt 25/11)
attract Mozambique into its sphere of (1996).
influence. President Mugabe expressed concern at the
There is little to surprise in the coupling Many African delegates had wanted Dr continued dwindling of foreign direct
of Francophony and the battle for markets. Emile Derlin Zinsou, a former President of investment in Southern Africa despite
Benin, to be secretary-general, and felt that SADC efforts to create favourable invest-
Wherever one looks in Africa, whether Boutros-Ghali was being imposed on them ment conditions. Speaking on November
francophone or anglophone, a tough econ- by Paris. 19th he said the region should embark on
omic struggle is underway in former a vigorous marketing campaign to ensure
French or Belgian colonies as indeed it is Although the appointment of the Egyptian that FDI improves.
in the former French possessions of Viet- former UN chief was eventually passed
nam, Laos and Cambodia. Cultural influ- unanimously, the issue brought to a head Meanwhile SADC General-Secretary
ence and economic muscle go hand in African discontent with France in several Kaire Mbuende told the summit that aver-
hand. areas, such as declining aid, toughening age inflation in the 14 community coun-
immigration controls in France and a sus- tries should be less than 10% by the year
Growing Pains picion of a loss of interest by the former 2000 due to rigorous fiscal discipline.
But disputes concerning human rights and colonial ruler. Mr Mbuende also noted that 70% of intra-
senior jobs have sent sparks flying over The Africans also tried to limit the sec- SADC trade was carried out with customs
efforts to develop the Francophonie group- retary-general’s term of office to two duties of less than 5%, and said that he
ing on the lines of the Commonwealth. years. The French insistence on four years believed that in the next two years the
There was friction over the hiring of for- won the day. But there was a poisoned SADC could become a free-trade zone for
atmosphere around the appointment, and at least 70% of all products sold in the
mer United Nations (UN) boss Boutros region.
Boutros-Ghali as the community’s Sec- Boutros-Ghali stayed away from the clos-
retary-General at the summit—perhaps a ing news conference, pleading arthritis. This optimism was not shared by Nico
strange choice given the emphasis placed France was also at odds with other mem- Czypionka, of the Standard Bank of South
on Frenchness. bers over the appointment of Belgian Africa, who said southern Africa would
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November 16th–December 15th 1997 Africa Research Bulletin – 13247

have to improve its infrastructure and its had improved significantly since May,
working practices in order to really boost CO-OPERATION AND with Egyptian exports up by 35%. Steel
economic expansion. TRADE and iron are the most important products
traded with crude lead recently added to
An article in the International Herald EGYPT the list of Moroccan exports to Egypt.
Tribune noted that much of the region’s (EGG 16, 24/11)
promise remains to be fulfilled. The Action Plan
region’s largely resource-based economies Egypt on November 15th spelled out its
continue to trade more with the developed perspective for all-out development in a MALI
world than with one another. Less than a nine-point plan of action presented by
quarter of the bloc’s $45bn a year in trade Exports Up
President Mubarak to a joint session of the
occurs between member nations. People’s Assembly and Shura Council. Malian exports reached CFA156bn during
the first half of 1997, up by 26.4% in
These capital-poor countries also attracted The president stressed a new keenness to relation to the same period of the preced-
just 0.3% of global foreign direct invest- improve Egyptians’ living standards and ing year. The two main sectors affected are
ment in 1996, or $1.2bn, according to achieve an all-out development to enable cotton and gold. The cotton sector, with
Standard Bank of South Africa, and two- them to keep pace with progress and CFA92bn registered at 5.5% rise. However
thirds of that amount went to just three of advancement. He said the government had cotton’s share in total exports has been
the 14: South Africa, Angola and Tan- embarked on projects nationwide and falling as it now only represents 59.3%
zania. launched an ambitious development drive compared with 71% in 1996. Since the
to move from the confines of the old valley Sadiola gold mine was opened the gold
The region’s negative image—a legacy of to a new one with the aim of expanding
past conflicts and economic mismanage- sector has progressed by 130% compared
the area of arable land and redrawing the to the first six months of 1996. Gold’s
ment—is perpetuated in many cases by country’s demographic map.
unreliable water and electricity supplies, share in Malian exports has gone up from
foreign-exchange controls, immigration Such projects, he told the session, incor- 17% to 31% in a year.
restrictions and uncertainty about land and porated providing Nile water, for the first The other sector which has experienced
property ownership. (AFP 18/11, HT 21/11, time in Egypt’s history, to irrigate more progress is that of fruit and vegetables. In
R. Harare 19/11: BBC Mon.) Last reference than 620,000 feddans in Sinai, another fact, with CFA1.3bn in the first six
p. 13174 similar scheme is being implemented in months, this sector is up 70% on 1996 and
southern Egypt’s Toshka, with the aim of now accounts for 1.7% of exports. On the
cultivating more than 500,000 feddans, in other hand, the cattle sector, with
IN BRIEF addition to Shark el-Owainat designed to CFA8.2bn, although it still makes up 5.3%
cultivate 200,000 others. He also made ref- of exports, is down 11% on 1996. (MTM
UEMOA: Ministers from the largely franco- erence to the free trade zone and industrial 21/11)
phone West African Economic and Monetary and mining schemes to be implemented off
Union (UEMOA) have postponed for two years President’s Visit to US
a customs union with a common import tariff the Gulf of Suez and in Upper Egypt.
for goods from outside the region. He also reaffirmed the necessity of getting The US announced on November 19th that
Egypt out of the limited-income nations’ it was increasing aid to Mali by $6m (20%)
Ministers from the eight member countries on the occasion of a meeting at the White
decided to put back the start date from January club in order to become an advanced coun-
1st 1998, to January 1st 2000, after a sometimes try whose nationals earn higher incomes. House between Presidents Bill Clinton and
heated meeting in Burkina Faso’s capital Oua- Alpha Oumar Konare. Half of this sup-
gadougou. The nine key thrusts are: plementary aid is to finance a $3m project
(i) implementing giant development pro- for the “political and economic” develop-
Cote d’Ivoire’s Finance Minister Ngoran Niam- jects aimed at upgrading infrastructure
and improving living standards; ment of the North, the US presidency
ien, chairman of the UEMOA ministerial coun- announced in a communique. The project
cil, announced the delay but said that the minis- (ii) focussing on the role of Egyptian
ters had agreed that the common import tariff youth; will be carried out by the US Aid for Inter-
should not exceed 20% and would be introduced (iii) stressing the importance of continuing national Development Agency (USAID)
in stages. education and training development and is aimed at facilitating the return home
(iv) enhancing the ability to absorb and of Touareg refugees. Several thousand
The common external tariff will replace a var- introduce more high technology into Touaregs fled to Burkina Faso from 1991
iety of duties and taxes ranging up to a ceiling all areas of life; onwards because of the conflict with the
of 65.5% in some parts of UEMOA, a grouping (v) increasing agricultural and industrial
of Benin, Burkina Faso, Cote d’Ivoire, Mali, exports; Bamako government.
Niger, Senegal, Togo and Portuguese-speaking (vi) development of the Egyptian country- $2.4m will allow the US to train Malian
Guinea-Bissau. side; troops involved in international peace-
(vii) giving priority to Upper Egypt prov- keeping operations. This training is to
The first reduction will take place on January 1st inces;
1998, lowering the ceiling to 35%. The second (viii) a comprehensive programme for begin in January 1998. Before the meeting
reduction will take place on January 1st, 1999, reform of state administrative appar- Mr Clinton’s spokesman Michael McCurry
cutting the ceiling to 30%. atus and bureaucracy; stressed the esteem in which the US held
(ix) paying close attention to environmen- President Konare’s government saying
The ministers agreed to start, from July 1998,
defining categories for goods from outside the tal conservation. Mali was “one of the real successes of
zone—those attracting no duty, those attracting Meanwhile Egypt and Morocco are to Africa.” Mali is considered by Washington
five per cent, 10%, 15% and 20%. The bands initial an accord for the establishment of a as a sort of model on the African continent,
would take effect on January 1st 2000. (EGG free trade zone. Officials said recently that a country which has resolutely embarked
30/11) Lome Summit p. 13082 trade exchanges between the two countries on the dual path of democracy and econ-
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13248 – Africa Research Bulletin Continental Developments

omic liberalisation. The meeting between who was at the head of the 100-strong Chi- the United States. All financial operations
the two presidents allowed them to nese delegation—announced agreements to with US banks have come to a halt and
strengthen “the solid partnerships” accord- establish 12 joint ventures in South Africa, parallel market rates for the dollar have
ing to the White House communique. Dis- adding that they only represented part of a risen sharply to above SD200.
cussions centred on promotion of democ- package of deals, and that economic The head of the foreign currency section
racy, settling regional conflicts and cooperation would expand rapidly after the at the Bank of Khartoum, Kamal Abdel
questions of trade and investment. The two establishment of diplomatic ties between Aziz said that in the long run it was inves-
countries are to organise a trade confer- the two countries. tors who would be the victims of the
ence in Bamako in 1998. The fact that aid South African President Nelson Mandela embargo. He estimated the money frozen
to Mali has been raised at a time when the announced late in 1993 that Pretoria would in the US at no more than $20m, and that
US is cutting public aid to developing switch diplomatic recognition from Taipei the real challenge facing both banks and
countries is testimony to the regard in to Beijing by January 1st 1998 but accord- investors was to come up with alternatives.
which Konare is held. (AFP 18/11)
ing to reports in Beijing, the South African The more extreme advocates of sanctions
side has been dragging its feet on finalising in the US Congress are unlikely to climb
MOROCCO a date for the exchange of ambassadors. down but the administration itself is div-
(SS 14/11)
Trade Up with Rest of Africa ided about how far it should go. The state
department fears an adverse reaction from
Moroccan trade with African countries in UK Pledge Africa and especially the Arab world.
1997 has reached 5.04bn dirhams with British Prime Minister Tony Blair and
imports worth 3.64bn, an increase of An executive of Citibank, the only US
South African Deputy President Thabo bank operation from Khartoum, said that
57.4% compared to the previous year. The Mbeki agreed to boost economic relations
marked increase is due in part to the large since the announcement of the sanctions,
between their two countries after the first the Sudanese “have been extremely co-
quantity of crude oil bought by Morocco meeting of their “bilateral forum” in Lon-
from Nigeria, according to the Moroccan operative, but we need clarification from
don on November 25th. It was described Washington.” It has only a small presence
Bank of External Trade (BMCE, Moroc- by officials as “very cordial.”
co’s foremost private bank). in the country, but finances the important
A bilateral agreement on the protection sugar trade.
However, Moroccan exports to Africa and promotion of investment was signed.
have dropped by 20% from 1.74 in 1996 Other US companies had been given 30
Similar forums are now working in South days to divest themselves of existing
to 1.39bn dirhams the following year. Africa’s other major economic partners.
Value of exports is only 6.6% of all Mor- investments in Sudan, or apply for special
occan sales abroad, the same source said. Blair committed the UK during its Euro- licences, but a special case was being made
pean Union (EU) presidency to pushing to import gum arabic. (AA 14/11, EA 14/11)
In 1997, Moroccan trade with other Magh- forward the trade talks between the EU and US Hardens Sanctions p. 13213
reb countries’ (Algeria, Tunisia, Libya) South Africa.
have been significant, despite a fall
recorded during the period. He praised the forum as a further IN BRIEF
Moroccan imports from other Maghreb expression of the “excellent relations” Algeria–Ethiopia: The two countries signed a
countries have reached D795m compared between the countries. The UK is South trade agreement and a memorandum of under-
to D992m in 1996, a 20% drop due to the Africa’s largest single trading partner, and standing on investment on November 20th. (TV
decrease in Libyan imports (D125m, largest foreign investor. Addis Ababa 20/11: BBC Mon.)
−72.9%) and Tunisian (D176m, −9.5%). Mbeki invited Blair to the next meeting of Angola–Denmark: The Danish government has
decided to introduce new sanctions against
As for Moroccan exports to the Maghreb the forum in South Africa in the second UNITA, according to a communique from the
region, they accounted for 42.7% of all half of 1998. (SS 28/11) Mandela in UK Foreign Affairs ministry in Copenhagen. They
p. 12623, Chinese Visit p. 13213 are aimed at contributing to peace and stability
Moroccan exports abroad in 1997.
in Angola, the statement said. They involve a
Trade with the rest of Africa has improved, ban on entry and visitors’ permits to high-rank-
particularly with Nigeria, which has SUDAN–US ing UNITA members and their families, a ban
become its primary supplier of oil, and on the landing of planes from UNITA—con-
South Africa, whose sales of coal have Khartoum Hits Back trolled areas except for humanitarian planes car-
reached D317m, a 712.8% increase over Sudan has decreed that the US dollar may rying medicines or food. Danish companies are
1996. (AFP 30/11) Trade Figures p. 13140 not be used for any transactions in the banned from making available equipment or
country because of trade sanctions spare parts to UNITA or from offering mainte-
nance services. (AFP 26/11)
imposed on Khartoum by Washington on
SOUTH AFRICA November 4th. Benin–China: The two countries signed three
agreements on economy and trade on November
Chinese in Deals Worth $540m The Bank of Sudan, the nation’s central 27th. Chinese Premier Li Peng told visiting
The Chinese trade mission in South Africa bank, decided to freeze all US dollars in Minister of Foreign Affairs and Cooperation
visiting in November signed 18 trade and the Sudanese banking system and Pierre Osho that China would continue to pro-
investment contracts worth $540m. The instructed all investors, banks and individ- vide aid to Benin “within its capacity,” and that
largest deal was for the sale of $130m of uals to exchange their dollars for local cur- in the future enterprises of both countries should
be the mainstay of bilateral cooperation.
power transmission equipment by China’s rency or European currencies. (Xinhua 26, 27/11: BBC Mon.)
Northeastern Power Transmission and The measure came after Washington
Transformation Group. Burkina Faso–Ghana: Ghanaian President
imposed a ban on US trade with Sudan and Jerry Rawlings arrived in Ouagadougou on Nov-
Deputy Trade Minister Shi Guangsheng— froze the Sudanese government’s assets in ember 24th for a two-day “work and friendship”

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November 16th–December 15th 1997 Africa Research Bulletin – 13249

visit. He told the press that the visit was an the birr (Ethiopian currency) as common cur- Senegal (BICIS) and the International Bank for
opportunity to “discuss economic, cultural and rency. (R. Addis Ababa 21/11: BBC Mon.) Commerce and Industry of Guinea (BICIGUI).
commercial questions.” The free circulation of Ireland is to increase its aid by 35% in 1998 it A senior BICIS official, quoted by Reuters in
goods and people between the two states and the was announced during a recent visit to Dublin of early November, said the agreement “allows
bureaucracy which affects it, as well as elec- a delegation led by Ethiopian Foreign Minister citizens of the two countries to open bank
tricity connection through the Akasombo dam in Seyoum Mesfiu. (R. Addis Ababa 27/11: BBC accounts and to transfer funds by this means.”
Ghana were also on the agenda. Mr Rawlings Mon.) The operation was facilitated by the fact that
was accompanied by a 24-man delegation Kenya–UK: A recent imposition of a visa both banks belong to the French network the
including the Ministers of Foreign Affairs and requirement for Britons is expected to generate National Bank of Paris (BNP). The desire for
of Trade. This was President Rawlings’ first trip some £4.4m annually for the exchequer, tourism sub-regional integration is behind the agree-
to Burkina Faso since the assassination of sources said. A single entry visa now costs £40 ment, the BICIS official said. (MTM 21/11)
Thomas Sankara 10 years before. During his (Ksh4,280). (EA 24/11)
visit he went to the national assembly, addressed Libya–Niger: Libya has lent Niger $16m, On November 20th, Moroccan Tourism and
representatives of the chamber of trade and vis- according to the Nigerien government daily le Transport Minister Driss Benhima said Morocco
ited an industrial unit. Sahel, which said it was signed on November was very willing to develop its cooperation with
3rd and has “very favourable repayment con- Senegal in the fields of tourism, air transport and
The two countries have signed a cooperation related technical training. (MAP 20/11: BBC
agreement on the proposed oil pipeline from ditions.” The loan is repayable in 10 years with
a two and a half year grace period and annual Mon.)
Bolgatanga to Bingo near Ouagadougou. (Frt
25/11, R. Accra 20/11: BBC Mon.) interest of 3%. (AFP 26/11)
Senegal–Guinea: Transfers of funds between Zambia–India: Zambia has earned over $110m
Ethiopia–Eritrea: From November 22nd both the two countries will now be possible thanks in exports to India in the last 10 months, accord-
countries will use foreign currency in their trade to an agreement signed between the Inter- ing to deputy Trade Minister Ackim Nkole. (R.
and service transactions. In the past they used national Bank for Commerce and Industry of Lusaka 26/11: BBC Mon.)

1980s and currently produces over 200,000

2 Policy and Practice

b/d. Chevron, the leading US producer, is
committed to investing $700m a year until
the year 2000, to increase its production to
600,000 b/d by 2002. Chevron and Texaco
are the largest investors.
INTERNAL CONDITIONS Angola Key Indicators The World Bank says that export earnings
Land area: 1.2m sq miles could double within seven years and Ang-
ANGOLA Population (1996): 10.3m ola could overtake Nigeria as the conti-
Huge Potential GNP (1955): $4.17m nent’s largest producer, providing security
GNP per capita: $410 is maintained in Cabinda province.
Throughout Angola’s turbulent history, the GDP growth (1990–96): −0.2%
oil sector has been the mainstay of the Inflation (1990–96): 1,370% Angola will join the ranks of the oil elite
economy. Oil production is currently run- External debt (1996): $15bn in the 21st century and oil will drive the
ning at 730,000 barrels a day up from Debt service (1995): $458m rest of the economy, particularly the
Oil output b/d: 730,000 rehabilitation of the infrastructure.
360,000 in 1987.
Sources: IMF, World Bank and Besides oil, natural gas reserves are esti-
This brings in $4.5bn per annum, account- International Energy Agency
ing for 90% of total exports, 80% of mated at over 50bn cubic metres and the
government revenues and 42% of the government is seeking more investment to
GDP. develop the sector further.
New African reports that Angolan oil Mining is also a huge money spinner. Ang-
reserves are the largest in the southern olans are sitting on billions of dollars
hemisphere. Proven reserves in 1996 were worth of high quality diamonds and
5.41bn barrels of oil, though some analysts untapped deposits of gold, copper, zinc,
estimate that the true total might be tin, lead, iron ore, chromium and manga-
nearer 20bn. nese.
The multinational oil companies, who con- The potential for many of these metals has
tinued operations through two decades of not been properly assessed but analysts say
war, are now stepping up investment, that Angola could start producing gold and
exploration and development. They have copper economically.
been encouraged by new discoveries. In Diamonds have continued to earn valuable
1996 nine new oil fields came on stream. (NA Dec, AA 28/11) revenue even at the height of the civil war.
Exploration has a particularly high suc- But the main diamond producing areas of
cess rate. Lunda South and Lunda North, which
Total output is projected at over one waters in April 1996 and July 1997. Such account for two-thirds of total output are
million barrels a day by the year 2000. huge fields are expected to sustain output still controlled by Jonas Savimbi’s
ELF Aquitaine, the French oil company for 20–30 years. UNITA movement.
made two, large deep finds in offshore ELF has invested $3bn since the early Illegal mining is costing the state about
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13250 – Africa Research Bulletin Policy and Practice

$500m a year in lost revenues. The state He noted with concern that despite the
mining company Endiama hopes to extend BOTSWANA relatively good rains during the season,
its control into UNITA areas when peace Six-Year Plan Botswana’s 1996/97 cereal production was
is fully restored. Meanwhile it is planning only 25,000 tonnes compared to 90,000 in
to produce two million carats of diamonds President Ketumile Masire on November the 1995/96 season.
in the next three years. 13th reviewed elements of the National
Development Plan-8, which sets out poli- The expected El Nino weather phenom-
cies, programmes and projects to be enon had brought anxiety and uncertainty,
implemented over the next six years in a but Botswana was drought prone and had
Formidable Task a standing machinery to combat such situ-
speech before Parliament.
ations.
But despite its huge potential, the economy Masire told the house that a 1,000m-pula
is still in dire straits. The civil war killed ($270m) roads programme would result in In the further development of agriculture,
600,000, with a further 700,000 wounded all but 1,751km of Botswana’s 7,000km Masire said drought conditions must not
by landmines. This left painful scars on the network being paved. Airports at discourage Botswana from promoting
economy. Angola is the most heavily Gaborone, Francistown and Selebi-Phikwe diversified agricultural production.
mined country in Africa with an estimated would be upgraded and airfields would be Masire told the farmers that to protect Bot-
10–15 million mines still awaiting clear- built in some major villages. swana’s beef exports, their farms and the
ance. The cost of removing them is $6,000 country’s borders would have to be fenced.
per hectare. Cellular telephone networks had been
opened to the private sector, but fixed-line The restocking of cattle farms in Ngami-
The Angolan Gross National Product at services would remain a monopoly of the land after most of the herds were destroyed
$4.17bn is still substantially down on 1990 Botswana Telecommunications Corpor- to eradicate cattle lung disease was pro-
levels. Hyperinflation is still ballooning. ation (BTC), with service guarantees. ceeding and more than 52,000 head had
Budget deficits have led to steep been introduced, Masire said. (SAPA 13/11:
A revised industrial development policy BBC Mon.) Foreign reserves p. 13188A
depreciation of the national currency, the would be tabled during the current parlia-
kwanza. Physical infrastructure and public mentary session to reorientate the manu-
utilities are a shambles. Corruption is facturing sector to tackle the development DR CONGO
widespread and the economy is virtually of the export industry. Masire urged
non-existent apart from oil and diamonds. Debt Talks
officials renegotiating the Southern
African Customs Union (SACU) agree- Liability for external debt arrears
The MPLA government faces a formidable ment to speed up the process. exceeding $1bn (£600m) was a significant
task of rebuilding the ravaged country and item of discussions when an international
establishing relations with international The renegotiation was intended to balance conference on reconstruction of the Demo-
financial institutions. the scales to allow Botswana, Lesotho, cratic Republic of Congo opened in Brus-
Namibia and Swaziland to further indus- sels on December 4th.
In the words of Jose Pedro de Morais, an trial development.
IMF director, “Angola faces an extraordi- At the formal session of the “Friends of
Masire criticised the previous five-year Congo” meeting being chaired by the
nary situation which requires extraordinary development plan’s (NDP-7) implemen-
measures.” Angola hopes to get assistance World Bank, government delegates argued
tation record because some projects were that three agencies—the World Bank,
from the World Bank and the European still outstanding.
Union. International Monetary Fund (IMF) and
“It is now time for all stakeholders, includ- Africa Development Bank (ADB) acted
Private investment is still on hold because ing the private sector, nongovernmental irresponsibly in lending to the ousted
of the danger of renewed conflict with organisations (NGOs) and the civil society regime of President Mobutu Sese Seko
UNITA. Though Angola possesses the to deal resolutely and purposefully with despite evidence of endemic corruption.
most arable land in southern Africa, the the challenges that are bound to come our Congo’s external debt stands at $14.6bn—
revival of agriculture is still in jeopardy. way,” he said. including $10bn to bilateral creditors (the
To clear some of the NDP-7 backlog, a Paris Club) and $3.1bn to multilateral
Until 1975 Angola was a new food project implementation unit was estab- lending agencies. This is equivalent to
exporter and the world’s third largest cof- lished. A considerable volume of work was about 225% of former Zaire’s gross dom-
fee producer. But the share of agriculture tendered out to the private sector—cur- estic product and more than 850% of its
to the GDP has fallen from 50% in 1960 rently 90% of all projects were with priv- exports.
to 17% in 1995. The government hopes to ate sector consultants. Vocational edu- Debt servicing, which had long been
revive agriculture by providing financial cation and training would continue to be erratic, was discontinued altogether in
and technical assistance, but little progress given priority during NDP-8, with a budget 1993 and arrears have risen to about $9bn.
has been made so far. of 200m pula ($154m). The World Bank share of the debt is
Masire announced a review of government $1.4bn with arrears standing at $150m,
As a first step, the government must secure while arrears on repayment to the IMF and
an IMF standby facility. This will bring salaries and the advent of national tele-
vision over the period of the plan. A mass Africa Development Bank (ADB) total
World Bank finance followed by private $450m and $550m respectively.
finance for the development of natural media bill was being prepared and would
resources. Official and private donors have be presented to the house in the near Bank officials acknowledged that repay-
pledged $1bn towards rehabilitation, but future. A project to introduce national tele- ment of the arrears presented a formidable
all this is dependent on an IMF agreement. vision would then be implemented during obstacle to a successful recovery pro-
(NA Dec) UN sanctions on UNITA p. 13214A NDP-8. gramme but emphasised that they would
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November 16th–December 15th 1997 Africa Research Bulletin – 13251

Cameroon Privatisations
The Cameroon government has
published a list of the largest
companies to be privatised before the
year 2000, in the Cameroon Tribune as
follows:
Cameroon Development Corporation
(CDC), the country’s largest employer
(13,000), was set up 50 years ago. It
has offices in four of the country’s 10
provinces and deals in bananas, rubber,
tea and palm oil.
Three other giants: SOCAPALM (FT 19/11)
(palmoil); SODECOTON and
CAMSUCO (sugar refinery).
Three public utility companies: SONEL
(electricity); SNEC (water); INTELCAM ensure the return of foreign visitors, but
(telecommunications). their optimism is not shared by thousands
of Egyptians who depend on tourism for a
Three transport companies: CAMAIR, living. A sharp drop in occupancy has
(LM 4/12) CAMSHIP and REGIEFERCAM
(railways). already been recorded in hotels as inter-
national tour operators have cancelled all
assist the government to find a solution Three financial institutions: SOCAR and bookings until the beginning of 1998.
given Congo’s strategic importance. CNR (both insurance) and BICEC Daily revenue from Cairo museum, for
(bank).
Reconstruction of Congo is “among the (AFP 26/11) example, has dropped from $89,000 to
highest priorities for Africa,” said a World barely $206, with only 15 tourists visiting
Bank Statement. “Instability in the Congo instead of a daily 15,000.
and in the Great Lakes region has reper- are refused. Around Lubumbashi, the cop- Foreign governments have issued warnings
cussions throughout the continent . . . a per capital, notes of NZ500,000 and to citizens to avoid travelling to Egypt, but
growing and prosperous Congo would 200,000 are circulating. In the central the tourist exodus has not touched the
have a very positive impact on regional region of Kasai, the diamond area, only the coastal resorts of the Red Sea, Sinai and
stability.” old Zaires are accepted. Alexandria, where daily flights from Eur-
The governor of Congo’s central bank, The existence of three monetary regions, ope bring in thousands of holidaymakers.
Jean-Claude Masangu said the objective complicates any policy to kickstart the November marks the opening of the tourist
was to win rescheduling and some forgive- economy, particularly since, observed the season and Mubarak is determined to sal-
ness—settling arrears of $1.1bn–$1.5bn World Bank, “the transfer of funds from vage what he can, following 1996’s record
out of the $14bn total would be manage- one region to another, either through a of 4.2m visitors. Security measures at tour-
able, he said. (FT 4/12) bank or in cash, is difficult if not imposs- ist sites, travel routes, airports, hotels and
ible, while nearly all banks are bankrupt.” bazaars are under review, but until Prime
Monetary Reform (AFP 2/12) Business concern p. 13216A, Minister Kamal Ahmed al Ganzouri draws
Refusal to Pay Debt p. 13146C his “watertight plan” to ensure the safety
AFP reported that in early 1998, the new of tourists, the governors of the Red Sea
Zaire will be replaced by the Congolese and Alexandria will provide their own
franc. After years of hyperinflation, the NZ EGYPT security measures to prevent militant infil-
has stabilised in recent months at around tration.
NZ120,000 to the US dollar. This stabilis- Tourism Devastated by
ation has been achieved by a complete ban Massacre As yet, say business analysts, shock waves
on “creating money” since May. from the attack have yet to hit the Cairo
A tourist bloodbath in the shadow of stock exchange and no one is expecting it
In a preparatory document for the Luxor’s magnificent Pharaonic temples on
December conference the government said to take a nose-dive. Forecasts for the capi-
November 17th dealt a fatal blow to tal markets are quite good and the prevail-
“monetary reform is not just about chang- attempts by President Mubarak to convince
ing the currency, it aims to create a stable, ing sentiment among foreign investors is
the world that his five-year campaign to stay put until the end of the year.
convertible and easily transportable against Islamic militants was showing
money.” signs of success. On November 30th, the Minister of the
But the situation is complex. According to In the space of 30 minutes, Islamic mili- Economy, Mr Youssef Boutros-Ghali
the World Bank the financial system is tants managed to jeopardise the annual claimed the Luxor massacre would have
complicated and a severe problem. There $3bn of revenue earned by the tourist little effect on the economy, which was
are three monetary areas in the country, industry. It was the bloodiest attack on now so diversified that tourism only
each with a different fiduciary circulation foreigners since 1992. Fifty-eight foreign accounts for 4.9% of GDP. Egypt’s main
and with different rates of exchange rela- tourists were killed. sources of revenue are: oil, the Suez Canal
tive to the dollar. and remunerations from workers abroad.
Egypt’s tour operators are quietly confi- Egypt’s growth rate, currently 5.5% is set
In Kinshasa and throughout most of the dent that new security measures promised to reach 7–8% by 2000-1. (AA 28/11, AFP
country, notes worth more than NZ100,000 by President Hosni Mubarak will soon 29, 30/11)

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Egyptians Wooed since the Juba River burst its banks on foreign and local capital and ensures quick
The Financial Times on December 1st October 18th. repatriation of profits “is causing a lot of
reported that the national airline had been The Guardian on December 3rd reported excitement abroad and some major inves-
ordered by the government to cut domestic the south faced a fresh flood disaster as the tors are keenly watching what we are
fares by 50% for three months in response Shabelle river rose, threatening tens of doing here,” Chief Allen said.
to the crisis facing the tourism industry thousands of people. The International Taiwan is to complete the construction of
since the Luxor massacre of 58 foreign Committee of the Red Cross regional the 500-mile Ganta-Manikoma highway
tourists. spokesman, Josue Anselmo, said the situ- started before, but abandoned because of
EgyptAir has also been instructed to ation was deteriorating and people fleeing the war. Taiwanese investors are also to set
increase the number of domestic flights in the area were falling victim to numerous up a huge rubber plant to add value to the
the hope of encouraging Egyptians to visit diseases. He said the road between the country’s rubber output before export. The
tourist destinations. capital Mogadishu and Jilib had been cut. new plant will manufacture surgical
A Red Cross convoy was the last relief to gloves, condoms, rubber sheets and other
Mohamed Rayan, chairman of the state- leave Jilib after helping 25,000 displaced rubber products. The spin-off from this
owned airline, said the number of foreig- people. operation will be more jobs for Liberians
ners flying EgyptAir fell by 19% immedi- and more cash for the national economy.
ately following the attack. Flights from Other aid workers said they feared the
Europe and Japan, where the bulk of the Shabelle could burst its banks and join the Apart from iron ore, Liberia’s rich mineral,
murdered tourists came from, have arrived Juba river near Jilib town to form a large agricultural and water resources have gone
with as few as 10 passengers on board. lake that would displace more than 40,000 largely unexploited for all these years.
people. (HT, GD 3/12) South African investors and farmers, with
The number flying to Luxor has fallen by money to spare, are hugely interested in
72%. Hotels there have recorded between Uganda these areas of Liberian life.
5 and 10% occupancy levels. Already the South African-based World
About 29 people are reported to have been
The government has strongly advised killed by landslides and floods caused by Development Group funded by the Crown
hoteliers to avoid mass lay-offs. So far this heavy rains in Bulucheke and Bunika sub- prince of Saudi Arabia proposes to invest
strategy appears to have been followed, as countries in Manjiya County, Mbale Dis- US$5bn over five years in a 250 sq km
hotels in Luxor have opted to give staff trict (eastern Uganda). In Bulucheke sub- free zone off the coast of Cape Mount and
paid holiday while hoping for the return of county, Buweswa and Bukigaye bridges Bomi counties and Marshall.
visitors. (FT 1/12) Land law p. 13215B were completely washed away and com- To be called the Liberia Atlantic Free
munications were cut off. Police and resi- Zone, it will take in 15 miles of coastal
FLOODS dents searched for the dead who were waters within which a sea resort and free
feared to have drowned. port will be built.
Kenya The East African reported that food prices Inside the free zone, the World Develop-
The government on November 20th set up had doubled in parts of Uganda cut off ment Group plans to invest in real estate
an operations base in Garissa (North East- from supplies following unseasonably (both condominium and low-cost houses),
ern Province) to coordinate airlifting of heavy rains which destroyed crops and factory complexes, hotels, casinos and air-
relief supplies to flood-hit parts of the made feeder roads impassable. Mbarara ports. Funds for the project have already
province. The government at the same time (west), Mbale (east), Kisoro (south-west) been allocated and work will soon begin.
offered free air transport to businessmen to disticts were likely to suffer serious food
transport essential commodities and food- shortages because rain had destroyed The South Africans are also interested in
stuffs to the marooned regions. Local radio crops. (R. Kampala 23/11: BBC Mon., EA 1/12) the agriculture and timber sectors. Liberia
on November 22nd reported that Dadaab Last reference p. 13215C has 36m acres of rain forest and huge
refugee camps had been cut off as water water resources conducive to the pro-
levels continued to rise. The UNHCR sent duction of many exportable crops.
an urgent message to its Geneva head- LIBERIA The government is keen to encourage tim-
quarters as panic ran through the camps. Very Bright Future ber concession operators to upgrade their
On November 24th, the government equipment and produce semi-processed
declared the area a disaster zone after a The New African reporting on the first 100 timber instead of exporting raw timber.
month of abnormally heavy rainfall. days of President Charles Taylor, felt that
one of the most significant successes of the In this direction, a loan of $20m has
Around 122,000 refugees were said to be already been secured by the government
marooned in their camps; many of these period is the number of foreign investors
had even lost their makeshift houses. (R. and financiers knocking at the door. From for the establishment of a furniture and
Nairobi 20, 22, 24/11: BBC Mon.) Taiwan to South Africa, Libya to Saudi wood processing plant.
Arabia, Morocco to Ghana, Scandinavia to
Somalia France, Germany to America, Israel to Other Investors
Nigeria—companies and investors in vari- In late September, Libya announced its
The death toll in Somalia continued to rise ous fields have been knocking at Liberia’s return to Liberia, promising to put $500m
as floodwaters that had receded surged door at such an exciting rate that Chief into the economy over the next five years.
back again under pounding rain, relief Cyril Allen, chairman of the National The Libyans, according to Chief Allen, are
agencies reported on December 2nd. Investment Commission (NIC), can now keenly interested in the establishment of
A committee made up of representatives of smugly declare that the “future is bright, industries ranging from the mining of iron
the agencies reported 43 new deaths, very bright indeed.” The government’s ore, bauxite, gold, diamonds, and fruit pro-
bringing the confirmed toll to 1,542 dead “open-door policy” which welcomes both cessing etc.
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Other investors are:

(i) Sweden: they are interested in rehabil- TOGO
itating and extending telecom facilities On the Way Up
in Liberia. World Report Limited Inc. of London, Togo’s external debt stood at 746bn CFA
(ii) France: investors are seeking Liberian writing for the Independent (UK) presented francs at the end of 1996, and its internal
government approval for a GSM cellu- an upbeat report of Togo’s economy, debt—money owed by the state and state
lar phone system to set up an earth- claiming that after several years in the firms—amounted to 204bn CFA francs.
satellite station for a cellular phone doldrums, it was beginning to revive, with
system. a surge in foreign visitors looking for However, Prime Minister Kwassi Klutse
(iii) Nigeria: businessmen and companies investment opportunities. said the government intends to pay off
are interested in various fields. about 65bn CFA francs in 1997, including
(iv) Ghana: Ashanti Goldfields Company In 1997 the economy is expected to grow 7bn CFA francs that would go towards
has sent a delegation wanting to invest by 7.1%, slightly up from the 7% recorded pay owed to civil servants.
in the mining sector. Other investors in 1996, amongst the highest in Africa.
Mr Klutse says that there was some
interested in the banking and com- The government’s programme in 1997 was anxiety in liberalising the economy. “But
munications sectors. designed to correct the weaknesses that we came to realise that we need to trust in
(v) Morocco: has agreed to finance the occurred in 1996, particularly in the fiscal human beings. And the private sector is
rehabilitation of the main hydro-pro- consolidation efforts, and to accelerate the proving its capacity since we embarked on
ject in the country which supplies the implementation of structural reforms the process of economic revival in this
capital Monrovia with water and elec- agreed with the International Monetary country.
tricity. Fund and the World Bank.
(vi) Scandinavia: a consortium has “Coffee, cocoa and cotton have all shown
pledged US$6m for the rehabilitation The IMF has recently approved the third profits, resulting in more than 25bn CFA
of electricity transmitters on Bushrod annual loan under the Enhanced Structural francs being returned to the rural areas.
Island in Monrovia, and also to extend Adjustment Facility (ESAF) for $30m to Revenues from the Port of Lome have also
electricity to certain urban and rural support the government’s economic grown.
areas. programme. Togo has entered into a three- “All this has helped us to successfully
(vii) Israel: financiers are interested in year structural adjustment agreement with
the IMF for 1997–99, and plans to carry out the stabilisation of the public
road construction. finance restructuring policy that we have
(NA, Dec) privatise around 20 state companies.
slowly but steadily been putting together,”
The country is really only now beginning says Mr Klutse. A government budget
to emerge from the civil and economic enhanced by better public financial funding
NIGER turmoil which hindered development in the will further help to boost the economy.
early 1990s. Gross domestic product fell Mr Klutse says the World Bank and the
Spending Cuts by 18.4% in 1993, but has slowly picked IMF are satisfied with his government’s
up again. In September the World Bank handling of the reforms. The economic
On November 25th President Ibrahim Bare gave a $75m loan to help rehabilitate the
Mainassara suspended all official cel- country’s road network and boost farming. revival is heavily dependent on the
privatisation programme and direct foreign
ebrations and demonstrations which A further sign of recovery is the growing investment.
require state spending, a presidential com- balance of payments surplus, which
munique announced. “Because of the parti- reached 13.2bn CFA francs ($23.3m) in Fortunately 1997 has seen a sharp rise in
cularly difficult economic and financial 1996, up from 1.5bn CFA francs in 1995. the number of foreign investors visiting
Togo to investigate business opportunities.
situation that Niger is experiencing, which The pick-up in the economy owes much to The state is preparing to sell many of its
is complicated by the worrying agricultural increases in production of commodities banks in 1998, as well.
results, the President of the Republic has such as coffee, cocoa, cotton and
decided to cancel all official displays of an phosphate, which is the country’s main
ostentatious character which are not useful export.
but are expensive.” This decision affects (World Report) (see infrastructure and map p. 13261)
the national championship of traditional
fighting in particular. The championship
was planned for February 1998. It also
affects the youth festival which would arrears and students have not received South Africa’s rural areas. R85m will go to
have cost the state several million francs. grants for 13 months. Because of poor tax the public works department’s community-
These celebrations were set up by General performance in recent months, the World based programme, R150m to the water
Seyni Kountche (1974–87) during the per- Bank and the IMF, which made an adjust- affairs and forestry department’s working
iod of the uranium boom, Niger’s main ment agreement with Niger in 1996, have for water project, R50m to the welfare
export resource. President Mainassara also refused to give the country any supplemen- department’s income-generation pro-
launched an appeal “to the conscience” of tary credits. (Frt 17/11) Budget 1998 grammes, and R15m to the health depart-
citizens for “rational” use of the poor har- p. 13221C ment’s nutrition programme.
vests. He invited people to greater “moder- At a press briefing in Cape Town, Finance
ation and simplicity” in expenditure during SOUTH AFRICA Minister Trevor Manuel said government
ceremonies like baptisms, marriages and had already targeted the poorest communi-
funerals. Poverty Relief Programme ties by increasing pensions and extending
The financial crisis is exacerbated by a The government on November 19th child grants. The poverty relief allocation
cereal deficit of 152,000 tonnes which has unveiled plans for the allocation of would target able-bodied people of work-
exposed over a quarter of the population R300m, set aside in this year’s budget for ing age who were not covered by the social
to famine. The country’s 40,000 civil ser- poverty relief, to create jobs and extend the security net.
vants are experiencing six months salary social security net to the unemployed in Public Works Minister Jeff Radebe said
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13254 – Africa Research Bulletin Policy and Practice

the country’s poorest three provinces, the ville, a statement said. At the same time, food collection of regional and local develop-
Eastern Cape, KwaZulu/Natal and the rations, soap and blankets will be distributed to ment taxes, which will be transferred to the
Northern Province, would be targeted by the most vulnerable of the displaced people in decentralized collectives which, will be
Pointe-Noire. Replacement of Red Cross infra-
his department. The community-based pro- structure destroyed and looted during the war, operational after local elections, Radio
gramme, aimed mainly at women, focused as well as the setting up of a federation del- Bamako reported.
on labour-intensive construction which egation in Brazzaville are also planned. (MTM
could lead to sustainable income gener- 28/11)
Concerning expenditure, the budget is
ation and poverty alleviation. fixed at CFA 433.71bn, compared to CFA
Ethiopia: The economy continues impressively 411.66bn in 1997, an increase of 5.35%.
Water Affairs Minister Kader Asmal said with GDP growing at 7% in 1996 and a forecast
his department’s highly successful work- 6% in 1997. Inflation will be between 0–2%. Consequently, the deficit is estimated at
ing for water programme, which involves The exchange rate against the dollar is stable. CFA20.96bn, compared to 27.58bn in
the clearing of alien vegetation, had (EAA Nov) 1997, a reduction of 24.2%. This reduction
already demonstrated its value, saving Mozambique: Preliminary figures from the in the deficit, initiated in the budgets of the
millions of rands in helping to maintain August general census show 15.7m people in the previous years, is in line with the govern-
water supplies. country. The population grew by 4m compared ment’s determination finally to achieve
to the 1980 census. Nampula and Zambezia financial balance.
The thirty-eight projects had to date cre- Provinces are the most populous, with 40% of
ated 9,000 jobs, more than half of which the Mozambican population. (R. Maputo 19/11: An analysis of sector expenditure confirms
were being carried out by women in rural BBC Mon.) the priority the government accords to
areas. The R150m allocation would result Rwanda: King Faysal Hospital, one of Rwan- development, especially in the educational
in 100 additional projects and an estimated da’s major health facilities built with the funding and health sectors. In fact, 23.92% of cur-
40,000 new jobs countrywide, he said. of Saudi Arabia, has been handed over to the rent expenditure goes to education, com-
management of a South African private com- pared to 23.10% in 1997.
Health Minister Nkosazana Zuma said pany, Netcare Holdings Ltd. The hospital is the
R40m of the welfare department’s allo- first state-owned government enterprises to be The budget was to be presented to the
cation would be distributed by the prov- liberated under the new privatisation policy. The National Assembly for approval. (R.
inces; the balance of R10m would be dis- government will take 35% of the shares, Netcare Bamako 14/11: BBC Mon.) Budget Amend-
tributed by the national department. Of the will hold 35%, while the remaining 30% will go ment p. 13220, 1997 Budget 12851
R15m allocation for her own department, to Rwandan private investors. (R. Kigali 19/11:
she said the money would be spent in the BBC Mon.)
Northern Province, Mpumalanga and Tanzania: An IMF team which visited recently, MAURITANIA
KwaZulu/Natal, and would focus on the expressed satisfaction with performance as (Ouguiyas 100 = £0.35/$0.60)
issue of food security. (SAPA 19/11: BBC regards revenue, government expenditure and
Mon.) COSATU accepts labour bill p. 13217B foreign exchange reserves (over four months’ Budget (1998)
import cover). Inflation fell to 16.5% in 1996,
with this high figure attributable mainly to The cabinet, chaired by President Ould Sid
IN BRIEF drought. GDP growth, which was 3.6% in Ahmed Taya met on November 13th and
1995/6 and 4.2% in 1996/7, is targeted for 5% approved the draft budget for 1998, bal-
Benin: Workers of the General Confederation of in 1997/98. Once again this target may be anced at Ouguiyas 48.62bn. This amount
Workers of Benin (CGTB) and those of pro- adversely hit by the drought. The country is said represents an increase of around 8% thanks
fessional companies went on strike on to be 900,000 tonnes short of cereals—mainly
maize—and the lack of water is seriously affect- to the far-reaching reforms and the mod-
December 2nd, in condemnation of the 1998 ernization of taxation. The operating
budget, and calling for the scrapping of Article ing electricity supplies. (EAA, Nov)
11 relating to promotions on merit. Meanwhile, budget will increase by 12% in order to
the government on November 23rd sacked the cover the cost of the population census, the
directors general of the country’s four largest BUDGETS running of the Food Self-Sufficiency Com-
enterprises whom they accused of embezzling mission and increases in other social sec-
CFA francs 38bn over two years. (R. Cotonou MALI tors, like education, health and the fight
2/12: BBC Mon., Frt 24/11)
(100 CFA = £0.10/$0.16) against poverty.
Cameroon: One of President Paul Biya’s clos- The Capital budget is Ouguiyas 26.2bn, a
est collaborators Titus Edzoa, ex-secretary gen- Budget (1998) 4.13% increase over 1997.
eral of the president’s office and former personal
doctor to the president who was Minister of A mid-November cabinet meeting chaired
Public Health until April 1997, was in early by Prime Minister Ibrahim Barbacar Keita In accordance with the government’s
October sentenced to 15 years in prison for adopted the budget for 1998 “a continu- directives on the better distribution of
embezzling public funds. He and Thierry Atan- ation of efforts already begun to improve funds in all sectors and on the need to give
gana, who received a similar sentence were tried the macroeconomic environment by priority to the development of infrastruc-
and sentenced late on October 3rd in the absence increasing state resources and managing ture, the improvement of economic growth
of their lawyers. (Frt 6/10)
public expenditure.” and projects which have social, economic
Congo-Brazzaville: The International Commit- and anti-poverty aims, the capital budget,
tee of the Red Cross launched an appeal on Nov- In the area of fiscal revenue, the budget is in addition to the budget of the National
ember 21st for funds amounting to $4m “to fixed at CFA francs 412.76bn, compared Company for Industry and Mines, will be
assist more than 370,000 people in Congo”. to CFA 384.47bn in 1997, that is an spent as follows:
Over the next nine months, the ICRC, working increase of 7.46%. (i) Land reclamation: Ouguiyas 7.92bn
with the Congolese Red Cross, intends to run a (ii) Rural development: 6.31bn
large number of programmes covering emerg- It is worth noting that contrary to previous (iii) Human development: 3.72bn
ency assistance, rehabilitation of amenities, shel- years, the 1998 budget has not taken into (iv) Institutional development: 1.5bn
ter and health for 300,000 returnees to Brazza- account the revenue generated through the (R Nouakchott 13/11: BBC Mon.)

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November 16th–December 15th 1997 Africa Research Bulletin – 13255

bigger component of GDP, rising from additional personnel needs arising from the
MOZAMBIQUE 3.5% in 1997 to 4.1% in 1998. The pro- planned expansion of school and health
(10,000 Meticals = jected real growth of 3.6% takes into networks in 1998.
£0.51/$0.76) account the fact that this will already be a Mozambique may again display inflation-
year of consolidation for this programme, ary tendencies in 1998 should drought
Budget (1998) which was introduced to curb illegal forecasts prove true. The government has
The newspaper Noticias reported on Nov- imports and make the Customs Department projected a 10% inflation rate for 1998. For
ember 12th that the government planned to more efficient. 1997, the government planned for a 14%
present to 1998 draft budget to the inflation rate, but it should stay below
Assembly of the Republic shortly. Basing Education and Health Growth 10%.
its calculations on current prices, it pre- The Noticias report went on to say that of The foreign debt service cost for 1998,
dicts revenue totalling 5.479m contos (one the total revenue estimate for 1998, 97.2% including interest and repayments, should
conto equals 1,000 meticals), reflecting a is from central level (Maputo) and 2.8%
real growth of 13.7% compared to current total $102m, or $17.6m more than in 1997.
from the provinces. Of total provincial rev- Of this $102m, 61% will be used to pay
forecasts for 1997. enue, about 76% corresponds to allocated interest, and only 39% to repay the debt.
According to documents to which Noticias revenue, and 24% to other fiscal and non- Foreign debt servicing will absorb 22.5%
has had access, this would represent a fiscal revenue. of the state’s total revenue for 1998, as
growth of 1% in GDP compared to 1997, Planned total expenditure at constant opposed to 21.8% in 1997. In terms of per-
raising revenue to 21.2% of GDP, com- prices is 9,462m contos, and all assess- centage of GDP, foreign debt payments
pared to 20.1% in 1997. ments are done in accordance with these will grow from 4.4% in 1997 to 4.8% in
Planned revenue was calculated on the prices for a more correct evaluation in 1998. (Noticias R. Maputo 13/11: BBC Mon.)
real terms. 1997 Budget p. 12851
basis of the inflation rate forecast for 1998,
GDP and employment growth, and fore- Planned real term growth expenditure for
cast devaluation. Fiscal revenue represents 1998, compared to expected 1997 levels, IN BRIEF
92% of total planned revenue. The govern- is: (i) current expenditure, ⫹9.3%, (ii)
ment believes income tax must, in real capital expenditure, ⫹4%; (iii) planned Burkina Faso: Radio Ouagadougou reported on
November 20th that the budget for 1998 had
terms, reflect a value almost identical to total expenditure, ⫹6.4%. In relation to been fixed at 441.81bn CFA francs in revenue
that of 1997. GDP, expenditure will grow by 7%, while and CFA468.377bn in expenditure, 18% up on
It is worth noting that industrial contri- expenditure on investments financed with the previous year. (R. Ouagadougou 20/11: BBC
bution tax will be reduced in all sectors of domestic resources is expected to increase Mon.) 1997 Budget p. 12781C
industry. This reduction will be compen- by 1%. Rwanda: A cabinet meeting convened on Nov-
sated for by growth in economic activity Current expenditure growth is mainly pro- ember 14th under the chairmanship of President
and more effective collection, so that the pelled by planned increases in priority sec- Pasteur Bizimungu, approved the 1998 financial
expected overall growth rate is 3.9%. In tors such as education, health and the budget totalling Rwandan francs 97.5bn. Of this,
addition, there will be a reduction in the 5.5bn are intended for the developmental
judicial system. Improvements in these budget. (R. Kigali 15/11:BBC Mon.) Last refer-
highest income tax bracket. This should be sectors’ operations will create the potential
compensated for by a wider tax base. ence p. 12521C
for rapid socioeconomic growth. Capital
Overall, however, income tax revenue expenditure prioritization is based on
should decrease by about 2.4%. objectives defined for the 1998–2000 Pub- BANKING AND
Projected real growth of taxation on goods lic Investments Plan, which is being draft-
and services is 12.5%. This projection con- ed. MONETARY
siders as negligible the effect of the intro- Of the total expenditure planned for 1998, AFRICAN DEVELOPMENT
duction of Value-Added Tax during the 49.1% corresponds to current expenditure
year. The following developments pro- BANK (ADB)
and 50.8% to investment expenditure.
jected for this type of taxation are New Loans
especially noteworthy: first, calculation tax Economic classification reflects the folow-
is expected to rise faster than GDP, ing main resource allocation lines in Benin: A grant of 700,000 units of
attaining a real growth of 9.6%, and expenditure structure: personnel expendi- Account (UC—$969.000) from the
increasing its contribution to GDP to 6.2%. ture—20% of total expenditure includes African Development Fund (ADF) for a
There is also consumer tax, combining salaries, remuneration and subsidies paid study into a rural electrification project.
internal transactions and imports, which to civil servants and other institutions. Out The study will look at the collection and
should experience a real growth of 21.1% of total planned expenditure in this sector, analysis of technical data on electricity
following the introduction of tighter 89% will be to pay salaries and 11% for demand, evaluate the energy market, estab-
import controls. other expenditure involving personnel. lish a programme for rural electrification
and look at detailed pre-projects on elec-
Finally, a fuel tax is planned in a way that About 47% of the total amount planned for tricity production and distribution. The
taxes are updated in line with inflation. salaries was earmarked for the education ADF grant will cover the entire hard cur-
Despite the cumulative impact of review and health sectors, 34% for defence and rency costs and part of the local currency
measures implemented in 1997, increased security, and 19% to the remaining sectors. costs. 86% of the total cost of the study.
sales should allow revenue collection to Compared with 1997, the education and An $11m ADF loan for livestock develop-
increase by 40% in real terms. health sectors show real growth of 9.7% ment has been approved by the ADB. This
The government also says projected cus- and 14%, respectively. Growth planned for loan is repayable over 50 years and aims
toms tax growth should see it become a these sectors is intended to cover to “improve food security, raise the general
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13256 – Africa Research Bulletin Policy and Practice

and property in the town of Toliara (south

AFRICAN CURRENCIES west) at risk from periodic flooding of the
Latest market or official rates of African currencies against the pound sterling and US dollar.
Fiherenana river by repairing and strength-
ening the present system of protection. The
Value of Value of work will be put out to international ten-
Country or Area Local Unit Sterling Dollar der. (MTM 28/11)
Algeria Dinar 97.46 57.85
Angola Kwanza 433209.40 247128.00 Mali: The ADF has approved funding of
Botswana Pula 6.39 3.79
Burundi Burundi Franc 680.60 403.97 the third phase of the education project in
DR Congo Zaire 231660.00 137500.00 Mali which has the aim of improving plan-
Djibouti Rep. Djibouti Franc 299.42 177.72 ning and management capacity, improving
Egypt Egyptian £ 5.72 3.40 the quality of basic education, developing
Eritrea Nakfa 11.24 6.67 professional training and improving edu-
Ethiopia Ethiopian Birr 11.24 6.67 cation for girls. The $13.9m loan will
Franc Zone in Africa* CFA Franc 994.62 590.35 cover all hard currency costs and 49.5% of
Gambia Dalasi 16.96 10.07 local currency costs of the project (total
Ghana Cedi 3773.96 2240.00
Guinea Guinean Franc 1908.88 1133.00 cost estimated at $15.4m). It is repayable
Kenya Shilling 106.94 63.47 over 50 years with a ten year grace period.
Liberia Liberian $ 1.68 1.00 (MTM 28/11)
Libya Libyan Dinar 0.64 0.38
Madagascar Malagasy Franc 8398.73 4985.00 Mauritius: A $12.9m loan from the ADF
Malawi Kwacha 30.48 18.09
Mauritania Ouguiya 280.82 166.68 to finance an electricity project aimed at
Mauritius Maur. Rupee 37.10 22.02 improving the electricity supply and the
Morocco Dirham 16.14 9.58 capacity of the present network through
Mozambique Metical 19366.80 11495.00 construction of extra 132 kv lines. The pro-
Nigeria Naira (official) 36.87 21.88 ject will reduce the incidence of power
Naira (market) 132.03 78.36 cuts and losses registered during trans-
Rwanda Rwanda Franc 586.81 348.30 mission. (MTM 28/11)
Sao Tome and Principe Dobra 4026.67 2390.00
Seychelles Sey. Rupee 8.56 5.05
Sierra Leone Leone 1389.96 825.00 Morocco: An $88,738m loan was
Somali Republic Som. Shilling 4414.18 2620.00 approved by the ADF on November 21st
South African Rand Area† Rand 8.18 4.85 to finance a project to reform and develop
Sudan Sudan £ 240.75 142.90 national savings. The project will improve
Tanzania Shilling 1034.89 614.25 savings structure and its contribution to
Tunisia Tun. Dinar 1.89 1.12 productive investment in the private sector.
Uganda Shilling 1917.30 1138.00 (MTM 25/11)
Zambia Kwacha 2356.20 1398.50
Zimbabwe Zimbabwe $ 24.51 14.55
* Franc Zone in Africa includes Benin, Burkina Faso, Cameroon, Central African Niger: A grant of $969,000 from the ADF
Republic, Chad, Congo Republic, Comoro Islands (Comoro Franc), Cote d’Ivoire, to finance a study into agro-pastoral devel-
Equatorial Guinea, Gabon, Guinea-Bissau, Mali, Niger, Senegal, Togo. opment in the Diffa department. The study
† South African Rand Parity includes Lesotho (Maloti), South Africa, Namibian Dollar, will look at “the potential and the con-
Swaziland (Emalangeni). straints of the region, the specific needs of
(FT 1/12) the population, particularly women”. In a
November 12th communique the ADB
added that this grant would cover all hard
living standard of herders and reduce pov- agement staff efficiency and setting up an currency costs and a part of the local cur-
erty through a better use of resources”, a infrastructure and equipment maintenance rency expenditure, 94% of the total cost.
bank communique announced. (MTM 21, system. Several health centres will be built (MTM 21/11)
28/11, AFP 22/11) and equipped around Bissau and in four
Eritrea: The ADF on November 21st other regions. The overall cost of the pro- Rwanda: Rwanda will receive aid worth
approved a $13.9m loan to finance a stock ject, of which the ADF loan will fund all $2m from the ADF for an institutional sup-
breeding project to increase food security the hard currency cost and 11.87% of the port project aimed at strengthening the
and stock breeders’ income. (MTM 28/11, local currency cost, is estimated at country’s “national capability in economic
MAP 24/11: BBC Mon.) $15.37m. The loan is repayable over 50 and financial management”. (AFP 6/11)
years with a deferred period of 10 years.
Guinea-Bissau: A loan of 10m units of (MTM 28/11)
account, nearly $13.9m, from the ADF was Tunisia: An $136.5m loan from the ADF
approved by the ADB on November 19th Guinea: The ADF has also approved a will finance a tourism development pro-
to finance a health development pro- grant of $850,000 to Guinea to finance ject which aims to expand hotel capacity
gramme support project. The aim of this feasibility studies for drainage and sani- and improve leisure facilities. A $94m
project is to improve the state of health of tation at Kankan, Kindia, Labe and Nzere- ADB loan to fund road improvements has
the population, particularly women and kore. (AFP 6/11: BBC Mon.) also been approved. The loan is repayable
children. This will be achieved by improv- Madagascar: The ADF has agreed a loan over 20 years, with a five year grace per-
ing primary health care, increasing man- of $8.8m for a scheme to protect people iod. (AFP 22, 26/11)
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November 16th–December 15th 1997 Africa Research Bulletin – 13257

national Development Association (IDA), 1996 (p. 12668), declaring that it will pro-
BURUNDI the World Bank’s arm for concessionary ceed with its liquidation.
Financial Crisis lending.
Dashing the hopes of major despositors
According to the governor of the Burundi The World Bank had already blocked the and shareholders of the institution, who
Central Bank, Mr. Mathias Sinamenye, the release of loans awarded to Brazzaville. have battled for a year to put the 21-year-
country’s financial sitution is seriously (AFP 7/11) Aid Needed p. 13208 old bank back on its feet, the Director of
affected by the current crisis. In the past the Deposit Protection Fund, Mr. Michael
four or five years, the country has lost 25% Cherwon, said that only fresh capital injec-
of its purchase power and commodity
EGYPT tion could have saved KFB, which was
prices have risen considerably Mr. Sina- Easy Access insolvent to the tune of Ksh1.6bn
menye said the government has got into ($23.8m).
debt with the Central Bank and other local At least one of Egypt’s public sector
insurance companies is to be part-priv- A number of the bank’s larger depositors
banks in order to pay salaries and current recently made an unsuccessful last-minute
expenditure. atised within a year in advance of signifi-
cant reforms that will allow foreign attempt to seek audience with the Central
The government now owes some 36bn insurers greater access to the largely closed Bank of Kenya Governor, Mr. Micah
Burundi francs to the bank. The govern- Egyptian market and give the sector a big Cheserm, after the Fund, which is the
ment also finds it very hard to pay the role in achieving the government’s econ- official liquidator, gave notification that it
foreign debt. That is why, according to Mr. omic growth targets. would sell off all the bank’s assets. (EA
Sinamenye, it is unthinkable at the moment 1/12)
to talk about pay rises. He said the door is Announcing the measures at a meeting of
open to anyone who wants to get infor- Egypt’s leading insurers on December 1st,
Mr. Yousef Boutros Ghali, Minister of World Bank Questions Aid
mation on public coffers.
Economy, largely brushed aside criticisms The World Bank has questioned the fin-
With regard to reserves of foreign cur- by opponents of a free market in insurance ancial aid it awards Kenya saying it has
rency, the governor of the Burundi Central who claim the industry provides an not enabled the country to make any sig-
Bank says the bank can hold for more than adequate range of services. nificant progress in terms of economic
six months with some 35bn Burundi francs growth, the bank’s director in Nairobi,
in hard currency. (R. Bujumbura 7/11: BBC At present, 75% of Egypt’s insurance mar-
Mon.) Embargo Circumvented p. 13144 ket is dominated by three state-owned Harold Wackman, told a press conference
giants formed out of the nationalisation on November 26th. He explained that the
and merger of 160 companies in 1961. pace of development in Kenya had slowed
CAMEROON despite the aid.
A further 20% is controlled by part-public
Commercial Bank Opens part-private companies, while the rest is in “Since 1980 Kenya has received ten struc-
the hands of two joint ventures part-owned tural adjustment loans totalling $1.022bn
The Commercial Bank of Cameroon . . . but no real economic growth has
(CBC), the ninth commercial bank in the by foreign partners from Bahrain and
the US. resulted” . . . funds have to be used
country, opened its doors in Douala on judiciously because the decision to con-
November 19th. Founded by one of the Mr. Boutros Ghali also announced that his tinue aiding the country or not depends on
richest businessmen in the country, Victor ministry and affiliated agencies were fund management”.
Fotso, the CBC (with headquarters in the undergoing structural adjustments to be
building of the defunct BIAO Meridien compatible with international banking Mr. Wackman said the government needed
Cameroon Bank) was given approval on standards. The ministry is also training its to increase the efficiency of the public sec-
July 25th by the Central African Banking personnel to enable them to deal with the tor and help it expand through raising
Commission, Cobac. Observers felt that latest management techniques and the free investments and employment”.
CBC becoming operational three weeks market mechanics.
after another bank—City Bank of During the press conference the IMF rep-
Cameroon—opened, marks the beginning The Egyptian Banking Authority will resentative in Nairobi, Reimer Cartens,
of a resumption in banking sector activities undergo a substantial structural and admin- said the suspension of the enhanced struc-
after a long and painful restructuring pro- istrative shake-up during the upcoming tural adjustment facility (ESAF) (for
cess which began in 1989. (MTM 28/11) period, especially in light of an expected $205m—suspended on July 31st—
Paris Club Terms p. 13222 inflow of foreign capital to Egypt esti- p. 13099) was still in operation as the
mated at £E 2bn. The state is planning to government had not yet made all the econ-
bring the volume of savings up to 25% omic reforms required for good manage-
CONGO from 18%, thereby increasing GDP from ment. “It is the government’s responsi-
World Bank—Payment Default 5% to 7% by the year 2000. (EGG 23/11) bility to follow the principles of good
Ambitions Forecast p. 13215 management so as to avoid a freeze on aid
The World Bank on November 7th in the future”, Mr. Carstens explained. He
officially declared that Congo was in pay- felt that business circles who believe that
ment default with six months payment KENYA the December 29th presidential and parlia-
arrears. As at September 30th the principal Finance Bank Liquidation mentary elections will help the economic
of the Congolese debt was the equivalent situation improve, are making a mistake.
of $75.5m. On October 31st arrears had The central bank’s Deposit Protection He felt that the government must
reached $15.5m, of which $11m principal Fund has sealed the fate of the Kenya Fin- implement healthy management to bring
and $4.5m in interest. Congo also owes ance Bank Limited, which sank with the country out of recession. (AFP 26/11)
$165.7m in concessional loans to the Inter- Ksh1.17bn ($18.5bn) in deposits in July Battered Shilling p. 13184

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vious week. Only 46 of the 79 eligible The registrar and Reserve Bank have in
MOROCCO banks made any bids at all. recent years had Pretoria Bank, Cape
16% Have Bank Account Commercial banks are currently preoccu- Investment Bank and African Bank put
pied with the looming deadline at the end into liquidation or curatorship, with dif-
Only 16% of Moroccans aged over 20 fering degrees of support.
years have a bank account, according to a of the year when they will have to raise
survey published on November 17th by a their legal capital base to N500m from the They gave Trust Bank a R1bn lifeboat in
new Moroccan weekly. The lack of bank- previous level of N50m. Banks are rushing 1992, but Wiese said that was a different
ing in the Moroccan economy is wide- to launch public share offerings in the case because Trust Bank’s size meant that
spread and presents a handicap to the hopes of raising new funds from the its collapse could have a large effect on the
establishment of economic reforms, stock exchange. country’s banking system.
according to Le Journal, a new Casablanca Eko International Bank and Co-operative African Bank, put under curatorship in
weekly, which has published its first edi- Bank are the latest to issue prospectuses in 1995, reported a pretax profit of R35.4-m
tion. This low figure is even more marked the hope of raising funds. The new anti- for the 18 months to September 30th.
in rural areas, where only 8.7% of people laundering regulations are a further con- Meanwhile African Merchant Bank Hold-
questioned said they used a bank account. cern for banks, now that every transaction ings (AMB) enjoyed a hugely successful
by individuals in excess of N1m has to be debut on the JSE on November 21st, trad-
“The banking sector boasts of modernism reported to the authorities.
but it only works for a tiny proportion of ing at almost double its listing price of R8
the population”, added the paper. The sur- Meanwhile, Ani is still not saying whether when the market opened. The share closed
vey was carried out for the paper using a the so-called ‘official’ rate of the two-tier at R17, 15, 114% above its issue price. (St
sample of 1,000 adults in the towns and naira, pegged for the past four years at $1 26/11, 3/12)
rural areas of Morocco, which has nearly = N22, is now to be abolished.
27m inhabitants. (AFP 17/11) Budget Wealth Tax Mooted
CBN governor Paul Ogwuma has mean-
p. 13221 while, outlined plans to make the naira The concept of a wealth tax and lump-sum
convertible in west Africa, at least in what payments to repair the socio-economic
he described as ‘formal sector trans- damage caused by apartheid gained
NIGERIA momentum at the Truth and Reconciliation
actions’. In informal currency markets
Naira Appreciates throughout the region, the naira is already Commission (TRC) business hearing in
convertible in practice, but at very mid-November.
Attempts by the Central Bank of Nigeria
(CBN) to put a bright face on the country’s depressed rates against the French-backed Respected Stellenbosch economics pro-
failing image have been helped by a rise CFA franc, even in the countries immedi- fessor Sampie Terreblanche proposed that
ately surrounding Nigeria. (AA 14, 28/11) a special annual “reparations” tax, to pay
in the value of the naira on the autonomous Exchange Rate Differential p. 13188
foreign exchange market. The naira for economic upliftment, be levied for up
appreciated to $1:N80 at the auction in to 20 years on individuals with more than
mid-November. SOUTH AFRICA R2-m in net assets.
Although demand for forex rose by $13m Banking Ups and Downs And TRC chairman Archbishop Desmond
to $79m, the exchange rate resulting from Tutu called on business to make “substan-
The Islamic Bank, which had an order for tial” contributions to the President’s Fund,
the auction was up from $1:N82 the pre- its liquidation lodged in the high court in
vious week. Manufacturers say that the from which compensation to individual
late November, was in such a poor finan- victims of apartheid will be paid.
slightly restored strength of the naira will cial state that it could not be saved, Chris
help to bring down the cost of imports. Stals, the Governor of the Reserve Bank, Terreblanche’s proposal is likely to cause
and Christo Wiese, the registrar of banks, major controversy as his definition of net
The newly re-appointed Finance Minister assets includes pensions, endowment poli-
Anthony Ani is already jubilant at the said.
cies and the value of shares.
achievement of upward movement in a Wiese had been in close contact with the
currency that has previously only ever bank for two years. “It had been on the He would like to see anyone with R2-m
been known for its dizzying depreciations intensive care list,” he said, “We were paying an annual tax of 0.5% for between
and devaluations. monitoring the type of business it did and 10 and 20 years, an amount of about
the credit it was extending”. The auditor’s R10 000 a year. People with higher assets
The reasons for the relative strength of would pay proportionately more.
naira at this stage in Nigeria’s continuing report was damning, claiming the bank’s
economic downturn are convoluted but lie accumulated losses were greater than its “The transformation process will remain
principally in the lack of liquidity in the capital and reserves, making it insolvent. incomplete as long as the economic power
economy, says Africa Analysis. Under “We can’t allow a bank to keep going and wealth that was accumulated through
Ani’s heavy-handed management, the when it is insolvent,” said Stals. He said racial structures remain undisturbed,” Ter-
government is continuing to starve all sec- its problems were even greater than those reblance said.
tors that depend on federal funding, reduc- of African Bank, whose capital adequacy “Iam in full agreement with Deputy Presi-
ing the availability of naira to all but a fav- had fallen under the minimum ratio of dent Thabo Mbeki that the stability of the
oured few. eight percent when it was placed in new South Africa can be at stake if we fail
At the Autonomous Foreign Exchange curatorship in 1995; Islamic Bank’s capital to find satisfactory solutions to inequality
Market run for the banks, dollars were sold adequacy was negative. and poverty.”
at N79 in the week ending November Mr. Wise said the bank, with a capital base Mbeki recently rooted the idea of a wealth
22nd. Demand remained low and only of R27-m and assets of R191-m, got into tax on individuals to address socio-econ-
$32m was requested, against $59m the pre- trouble through bad lending practices. omic inequalities.
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November 16th–December 15th 1997 Africa Research Bulletin – 13259

“A levy on wealth for redistributive pur- investment in the Middle East and Africa held by the Senegalese state 33.33% by
poses is preferable to any other form of could double in 1997, to $14bn. France-Telecom (through France Cable
taxation.” The wealth tax, he added, should The rationale for investing in Africa was and Radio) and 10% by the staff. 5% is to
not only hit whites, but everyone who admirably summarised under twelve points be handed to an African operator.
accumulated wealth during apartheid. in the placing memorandum of the Simba SONATEL represents 2% of Senegal’s
Following the failure of business to sup- Fund, namely: GDP and 5% of the country’s investment.
port this idea of a redistributive wealth tax, (i) Africa’s resources are increasingly in Its turnover has increased from
the parliamentary finance committee demand, especially from emerging CFA53.6bn in 1995 to 62bn in 1996. In
started to take a tougher stand on the issue. Asian economies, 1997 Mr. Mbaye foresees turnover of
(St 19/1, 3/12) (ii) Africa’s governments are now promot- CFA75bn. The company intends to invest
ing private sector-led, export-oriented
economies, CFA110bn by the year 2000, mainly to
(iii) Africa’s resource-based companies bring the number of lines up from 66,320
STOCK MARKETS have become more productive and glo- to 200,000 in two years. (AFP 24/11)
bally competitive,
Lessons To Be Learned (iv) domestic political considerations are
Stock prices rose in major markets around becoming less intrusive on the busi- SWAZILAND
the world on December 1st as worries ness environment,
(v) privatisation is reviving key sectors of Bank Restructuring
about Asia’s financial problems eased, but, the economy,
Africa Analysis commented, there were News that the Swaziland Development and
(vi) the opening of new stock markets and Savings Bank is to be restructured has left
vital lessons to be learnt for Africa, where the rejuvenation of existing ones is
returns have been high. a bitter taste in many mouths in this federal
enhancing the role of capital and so
broadening opportunities for portfolio kingdom says Africa Analysis. The ‘Swazi
Sub-Saharan Africa’s only world-ranking investors, Bank’ was established nearly 30 years ago
stock market is that of South Africa. Capi- (vii) foreign investment is returning, to assist peasant farmers who lacked the
talised at $270bn, it is the tenth-largest in especially in the natural resource sec- collateral to borrow from commercial
the world though still smaller than Hong tor, banks. In November it was announced that
Kong’s. Even the Philippines market, one (viii) regional economic co-operation is the government would effectively step in
of the smallest markets in south-east Asia, occurring in such key areas as infra- to save the bank collapsing under E2000m
has a capitalisation equal to the combined structure, development and transpor- ($41.6m) of debt.
value of the bourses in Zimbabwe ($2bn), tation,
(ix) the end of the era of fixed exchange The debt comprises unpaid and ‘under-per-
Nigera ($1.7bn), Kenya ($1.7bn), Ghana rates is allowing many companies to forming’ loans. Although details are not
($1.6bn) and Mauritius ($1.4bn). operate under more realistic, market- available, it is understood that several of
But the slide in world confidence has determined conditions, these relate to loans made to members of
(x) liberalisation of agricultural marketing the royal court and to well-connected busi-
occurred just as African equity markets are boards is reviving export-oriented
coming out of the cold: Zambia, Malawi, crop production, nessmen. Loans were supposed only to be
Namibia, Cote d’Ivoire, Botswana and (xi) the advent of accountability in govern- for farming equipment and agricultural
Swaziland have new or growing bourses. ment is seeing the political appointee inputs, but some were apparently made for
Those of Tanzania, Uganda, Mozam- replaced by the technocrat and South the purchase of commercial properties and
bique and Ethiopia are at an advanced African corporations are now spread- farms. (AA 28/11) US Ranking p. 13182
planning stage. ing their skills, technologies, products
and capital across the African conti-
This has attracted European and north nent. UGANDA
American fund managers, although their (AB Dec)
1996 $1bn investment in emerging sub- IMF Loan Approval
Saharan markets is a pittance by inter- West Africa The International Monetary Fund (IMF) on
national standards. The $250m stake of the Senegal’s National Telecommunications November 10th approved a $138m loan to
largest investor, Morgan Stanley, amounts Company, SONATEL, launched a public support economic reforms in Uganda for
to about 10 minutes of trading on the New share sale affecting 17.67%, of its capital- the next three years, forecasting growth
York Stock Exchange. The ultimate lesson CFA34bn—on November 24th, at the rates of 7% and more.
is that Africans can no longer afford to be West African stock exchange whose head- The IMF said the loan would help
disinterested observers in internal develop- quarters are in Abidjan Cote d’Ivoire). Uganda—one of Africa’s richest states in
ments be they in far-away Thailand or Shares were to be sold for CFA19,500 agricultural resources—keep growth on
closer to home or turbulent Congo-Brazza- each with a minimum purchase of 5 shares, track and hold inflation down.
ville. (HT 2/12, AA 14/11) managing director of SONATEL, Mr.
Cheikh Tidjane Mbaye, told a press con- But it said the government could face rev-
Investment Rationale ference. He said 65% of the 1.8m shares enue problems in 1997/98 as tax reforms
available would be reserved for Senegalese take hold, and it urged the government to
African Business in a December report, do more to spur growth in the private sec-
said that increasingly managers of emerg- nationals, 15% for other member countries
of the West African Economic and Monet- tor.
ing market funds are including African
companies into their portfolio, noting that ary Union (UEMOA) and the remainder to “The government will need to exercise
Africa seems to follow the typical pattern international financial institutions. considerable expenditure restraint, focus-
of emerging markets. This trend should This operation is the third phase of SONA- ing only on the most essential,” the fund
continue as, according to the Institute of TEL privatisation which began in 1995. At said.
International Finance, rising portfolio the moment the company’s capital is 34% Land-locked Uganda is viewed as one of
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13260 – Africa Research Bulletin Communications and Transport

Africa’s star economic reformers. It was top 21 banks in the country. This required ing entry of new banks unless they pledged
the first recipient of the international com- a $50m investment by Chong. His com- to extend their branch network to the
munity’s Highly Indebted Poor Countries pany has grown from $8.6m worth of interior. (AA 28/11) Rate Drop Expected
debt initiative which aims to reward assets in 1990 to $1.2bn to date. p. 13225
reformist debtor states with the most gen- Hard on Westmont’s heels has been the
erous debt relief terms ever offered. (EGG entry of the Dutch financial institution
12/11) FMQ which has joined the Belgian bank IN BRIEF
Belgolaise to acquire the Sembule Invest-
Malaysian Bank Purchase ment Bank, now to be known as Allied Algeria: The National Association of Banks and
Westmont Holding is the latest investor to Bank. Foreign capital has also been Financial Establishments has decided to cut
enter the Ugandan banking sector, which injected into the Nile Bank and the Co- interest rates by more than 25%, from current
is currently trying to strengthen its regional operative Bank which have until now been rates, ranging from 113 to 17.5%, to between
locally-owned. Thus the commercial bank- 10 and 12.5% from January 1st 1998. Moreover,
position as East African integration gathers a maximum preferential rate of 12% will be
pace. Westmont’s Malaysian owner, ing sector has undergone a dramatic trans-
formation: 12 of the 21 commercial banks applied to investment credits. These cuts are in
Chong Chek Ah, has invested $11m in line with the decision to cut the banks’ profit
Uganda Commercial Bank, $6m of which are either 100% foreign-owned or have margins, the Central Bank’s discount rate and
represents a 49% share of equity, with the considerable equity in foreign hands. interests earned by savers. This decision is also
option to acquire the additional 2% needed New capital will help the banking sector to in line with a drop in inflation in the country.
to give a majority share. hold its own as the Cross-Border Initiative Therefore, in the past two years interest rates
strengthens regional trade, currently pro- have come down by more than 50%. The
Many people are questioning both jected to grow at 32%. Weaker banks wil Association’s Secretary-General, Mr. Ben-
Westmont’s suitability—it is primarily a probably be forced out of the market as khalfa, said: “We believe that the decision to cut
property company—and indeed that of its competition hots up. banks’ margins is the best incentive for econ-
owner, who is reputed to have a contro- A key government concern is that banking omic revival and economic reforms. As the
versial history in business, particularly in services become more accessible in rural banks’ joint statement said, we are also hoping
that other economic operators would also take
Singapore. However, Westmont has had areas—many investors view this with initiatives that might help our efforts to end the
considerable financial success, in particular reluctance despite an estimated USh200bn current recession by revitalizing the national
in the Philippines where it turned around placed under the proverbial mattress. To economy in the new year.” (R. Algiers 29/11:
the weak First Bank to become among the this end, government is reluctantly freez- BBC Mon.)

Mr. Kato said a passenger terminal would

3 Communications and Transport

also be built at the Red Sea resort town
airport of Hurghada to accommodate
around 9,000 persons.
A contract has been concluded with an
partner, which will probably be foreign. investment firm to fund the expansion.
AIRPORTS AND SERVICES (MTM 21/11) Mr. Kato added that the nation’s air traffic
Algeria had increased by 33% and passenger traffic
Egypt by 35%. He also noted that air traffic
The new civil aviation code—which pro- Egyptair is to take delivery of two Airbus bound to Cairo International Airport had
vides for the opening up of the Algerian Industrie A340-600s airliners in 2003, and dropped during 1996–97 with charter
air transport sector to private economic has taken options on two more. This model flights turning to the country’s other air
operators, signalling the end of a 35 year came on to the market in June and can seat facilities. (EGG 18/11, AFP 17/11, AA 28/11)
monopoly held by Air Algerie, and which 380 passengers. The two aircraft will be Airport extension p. 13120
was produced at the beginning of 1997, divided into three classes, and have Rolls
has now seen its first concrete application. Royce Trent 500 engines. Egyptair already Kenya
An air transport company was set up at the has an Airbus fleet (A300, A320/321 and Kenya Airways positioned itself for future
beginning of November between the air- A340-200) on its regional and long-haul growth in late November by introducing
line Air Algerie and the powerful national lines. The new airliner challenges the mon- major changes in its routes and flights net-
company Sonatrach. The company will be opoly of the Boeing 747 by being more work in Europe, the Middle East and
based a Hassi Messaoui, the country’s oil economical over ranges of up to West Africa.
capital. The new airline will transport 13,900km.
400,000 oil sector workers per year, pro- President Mubarak opened development The airline hopes to further boost its rev-
vide an air taxi service and evacuate sick works at the Cairo Airport control tower, enue, which grew by 13.2% in the first six
people. completed at an estimated cost of E£5bm. months of its current financial year.
The airline subsidiary Air Algerie-Sona- The head of the Civil Aviation Authority, According to unaudited results for the six
trach will be operational by the beginning Abdul Fatah Kato, put at some E£120m months ending September 20th the revenue
of 1998, and will have a fleet of two large the cost of development of Luxor Airport, rose from Ksh5bn ($78m) last year to
carriers and one jet. The company’s capital and added that expansion of the passenger Ksh5.7bn ($89m).
is dinars 700m, and will remain open. The terminal at the southern Egyptian facility Chief executive Brian Davies termed the
two enterprises hope to link up with a third would be completed in two years’ time. results a remarkable performance achieved
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November 16th–December 15th 1997 Africa Research Bulletin – 13261

TOGO
There has been a recent recovery in public of tarmacked roads the priority is the north of the two countries, studies
investment projects in infrastructure in Togo North/South axis (highway 1) which links are under way;
after several years of nothing happening at the port of Lome with Cinkasse on the (iii) the construction of a second hydro-
all. Most projects are still being studied but border with Burkina Faso. 600 of the electric dam at Adjrala on the
some have already started up and some are 700km needs re-tarmacking according to the Mono river. This could cover an
at an advanced stage. authorities. The World Bank has already additional 20% of the country’s
In terms of road infrastructure, the Minister awarded a $50m credit for the Atakpame- needs but the investment cost is
of Equipment, Mines, Transport and Post Blitta section—approximately 100km of very high (between CFA90 and
and Telecommunications, Mr. Tchamdja road (p. 13205A). Other sections have CFA100bn) and the project has no
Andjo, said that the authorities have attracted interest from other donors financing as yet.
conceived of a road programme which including the Arab funds and the European In so far as the port of Lome is concerned,
defines priorities, with the first objective Development Fund (EDF). Togo is also the authorities want to make it eventually
seeking financing for transverse axes— into a regional “hub”, a storage and
being to improve the state of the badly important for trade with neighbouring transhipment centre. Observers agree that
deteriorated roads. The programme has been countries Ghana and Benin, CFA2bn in Lome, which is the only deep water port in
worked out with aid donors. They also have
a programme for rural tracks, aimed at funding from the EU’s Stabex Fund and the region, has far greater expansion
opening certain areas up, as well as a CFA6bn from the French Development possibilities than its immediate neighbour
programme of works including bridges. This Fund (CFD) have already been pledged to and competitor, Cotonou. In the short term
programme was presented to aid donors at a finance rural tracks. 1998 will see the Togo wants to develop its role as a transit
launch of various additional invitations to point for landlocked neighbouring countries,
round table in March 1997. The minister tender for road projects. particularly Mali, Burkina Faso and Niger.
said that the amount of financing required In this context the priority given to the
for priority projects over two years was Tenders for a hydraulic dam plan—aimed at North/South road axis is important. As is
$100m. providing drinking water to the northern the project, which is under discussion at
town of Dapaong, have already been invited
Since then there has been progress on some and the contract should be awarded soon, present, to develop a “dry” port at Blitta, a
of the different projects presented. In terms the total amount of investment is CFA8bn, town situated more or less half way
between Lome and the Burkinabe border
financed with the help of the Kuwaiti Fund. and served by the Togolese railway—this
In the energy field, Togo is associated with would cut costs and delays in transporting
Benin within the CEB (Benin Electric goods to landlocked countries.
Community). The CEB imports electricity At the beginning of 1997 the CFD agreed to
from Ghana and the Cote d’Ivoire for the provide FF56m co-financing along with the
two countries’ national distribution West African Development Bank (BOAD)
companies and also manages the Nangbeto
hydro-electric dam, south of Atakpame, for the rehabilitation of some port
which provides only 20% of the needs of infrastructure (particularly container
the two countries, the remainder being terminals), the purchase of new maintenance
either imported or produced by thermal and haulage equipment and the reorganisation
of the computer system at the autonomous
power stations. The north of Togo is totally port of Lome (PAL). The aim of this
dependent on thermal power stations for its programme is to give the port the same level
electricity supply. Togo’s priority is to cut means as its competitors. Some commentators
the average price of a KWh and to provide think it is a preparation for eventual
other sources of energy, this is made more
urgent by the fact that Ghana is itself privatisation of the container terminal but
beginning to lack energy and wants to the government has not yet said so.
increase its tariffs. At the moment there are Finally in the telecommunications sector,
three projects in the pipeline or already the government’s projects of Togo-Telecom.
under way: Cellular telephone has already been
(i) connection with Nigeria, with privatised but the first network was awarded
estimated investment of CFA15bn to Togo-Telecom making some observers
some of which will be funded via doubt the authorities’ real desire to
the Special Nigeria Fund, managed liberalise this sector. The invitation to
by the African Development Bank tender to introduce a second operator was
(ADB); launched on October 6th but there are
(ii) connections between the high questions as to the Togolese market’s
tension lines in south Benin and capacity to support two operators. However,
south Togo, supplied by Ghana France Cable and Radio (FCR), a
and soon by Nigeria, with the subsidiary of France Telecom, is interests.
(MTM 31/10)

despite the violence that rocked the coastal buy one new B737 aircraft and lease two work of domestic services over the next
region recently, prompting many tourists more. A fourth would be delivered in two years beginning in early December
to cancel their travel bookings. The half- March 1999, bringing the fleet of B737s to with Eagle Aviation serving Kisumu and
year results were on target and he expected six. The airline would phase out the Rome Malindi.
a similar performance during the rest of the and Paris routes and discontinue the use of He said the airline would introduce two
year, should the coming elections be Fokker aircraft over the next three months. flights a week to Douala, Cameroon and
peaceful. Mr. Davies also announced a cooperation three to Lagos. Also planned are additional
Mr. Davies said the national carrier would pact with Eagle Aviation to expand a net- flights to Cairo, Khartoum, and Kigali.
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13262 – Africa Research Bulletin Communications and Transport

Bridging the Communication Gap

With an estimated population of around integrate the continent’s telecoms industry. In the meantime, work on a major United
500m people and only 3.5m phone lines, They are: States Agency for International
Africa is way behind the rest of the world Development (Usaid) project is currently
and still playing catch-up. The gulf between (i) Africa-One: spearheaded by AT&T, under way in the South African
Africa and other emerging markets is so which proposed the laying of a 30,000- Development Cooperation (SADC) region,
wide, that a recent report by FT Media and mile underwater fibre-optic cable to aimed at restructuring and modernising
Telecoms on the African telecommunications link 41 African countries, as well as regional telecommunications infrastructure.
market, compiled by Carl Edgar Law, hook up to networks in Italy and Saudi The programme is part of a four-year Usaid
claimed that there was “no chance of Arabia (map p. 12133); Regional Telecommunications Restructuring
catching up with the other emerging (ii) Afrilink: a Siemens proposal which (RTR) strategy. RTR aims to strengthen
markets regions by the year 2005”. would link the continent via 310 miles telecommunications management and
With a market conservatively estimated at of underwater cable hoops; technical capabilities through education and
(iii) Atlantis-2: a proposal to lay submarine
around $1.5bn a year and still growing, the fibre-optic cables between Brazil, training; resolving policy and regulatory
scope for foreign equipments and service Senegal, Spain and Portugal. This plan, issues; implementing national sector
providers is enormous. According to the improvement programmes in Tanzania and
International Telecommunications Union according to a London Financial Times Zambia, and increasing US investor
(ITU), as at 1995, Africa, which represents report, comes under an accord between awareness of opportunities within the
12% of the world’s population, held a mere Senegal, the Republic of Benin, Cape Southern African region.
2% of the world’s main telephone lines. Of Verde, Gambia, Guinea, Mauritania
and Togo with France Telecom, It is estimated that to bring the African
this, an estimated 60% is concentrated in Brazil’s Embratel, Marconi Portugal, telecommunications industry on to a
South Africa alone. The scale of the market Spain’s Telefonica and Argentina’s veritable par with other emerging market
waiting to be tapped is further amplified by Telintar; and economies, at least $12bn would have to be
the fact that around 70% of Africa’s (iv) Afrinetwork: in which NTT invested in mainline implementation alone.
population resides in rural areas served by a
mere 228,000 lines. International, a Nippon Telegraph and Coopers & Lybrand put the figure at around
Telephone subsidiary, is expected to $25bn, based on an average of $1,500 per
Four major options have been developed by play a leading role. line.
four different consortia which aim to
(WA 10, 17, 24/11, AC 10/10) Africa One p. 13192B

Kenya Airways, with its partner, KLM, will for the upgrading of the facility to boost Zimbabwe
also be operating eight flights a week to tourist arrivals in the resort town. Air Zimbabwe announced that it had
London and 11 flights a week to Amsterd- accumulated losses of over $12m in 1997,
am. The demand for the airport’s upgrading
was underscored during the recent heavy due to strikes and bad management,
Mr. Davies said the Rome and Paris routes rains, which cut off Malindi from Mom- according to chief executive Brendon
were no longer viable because of compe- basa, forcing hoteliers to hire private char- Donohoe. New flight schedules, better to
tition from cheaper chartered flights. The ter planes to airlift several hundred utilise equipment, are to be implemented
10-member staff would be redeployed. stranded tourists to Mombasa’s Moi Inter- by April 1998 to make the airline more
national Airport for their homeward competitive. (AA 28/11) Last reference
The airline would also double flights to p. 12978
Dubai. The new network would increase flights. (EA 14/11, 1/12) Eldoret downsized
p. 12425
the number of connecting flights through
Nairobi. PORTS AND SHIPPING
New Links
Meanwhile, the controversial $62m inter- Democratic Republic of Congo
national airport at Eldoret remains idle Equatorial Guinea: There are six sched- The DRC has decided to lower its port tar-
nearly a year after opening because airlines uled airlines and many charter companies iffs by nearly 30% in a bid to boost activity
say it is too expensive to use. It also flying to Equatorial Guinea, a far cry from at Matadi and Boma ports on the Atlantic
appears to lack a passenger base. the—recent—days when it was served by coast, official sources said on November
only one weekly international flight. Iberia 19th. The national transport agency
It is deemed uneconomical because its airlines now operates two weekly services
main runway is too short to take a fully (ONATRA) said warehousing and removal
each way between the capital and Madrid, fees had been frozen whilst wharfside
laden aircraft such as the Airbus 310. while Equato Guineana De Aviacion duties had been reduced by 50% from
The Kenyan government has, however, (EGA) has co-operated with Spainair to mid-November.
finally invited tenders for the expansion of run another flight to the Spanish capital.
Malindi Airport, almost two years after it Air Afrique now runs a Thursday flight ONATRA senior officials said the coun-
announced that the facility would be between Malabo and Abidjan, and Niger- try’s two sea ports “are the most expensive
upgraded to international status. ian Airways intends to resume flights in the world” for shippers and one official
between Malabo, Calabar and Lagos. stated: “We must try to get out tariffs to
Between 60,000 and 70,000 tourists visit the same levels as those at other African
Malinidi every year, but the majority use Cameroon Airlines has recently upgraded
its service between here and Douala with ports”.
Moi International Airport in Mombasa for ONATRA is particularly concerned about
scheduled and charter flights, while a few a new Dash-7 which will be more reliable.
Private Cameroonian company Air Affaires competition from the Congolese port of
go via Nairobi on scheduled flights. Pointe-Noire but also South African ports
Afrique continues its thrice-weekly flights
The tender announcement in the media to Bata, the economic capital, as well as a and Manbara, in Kenya, which are linked
comes in the wake of consistent appeals service to Malabo. (AA 14/11) by road and rail to the DRC.
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November 16th–December 15th 1997 Africa Research Bulletin – 13263

ONATRA hopes that the drop in revenue At present Liberia is the world’s second- partners had made an initial investment of
due to a decrease in tariffs will be offset largest maritime nation but, according to R1m, would offer ship’s agency, wharf-
by an increase of about 20% in traffic at the new, no-nonsense Commissioner for side, ship brokering, logistics and com-
the ports in 1998. Maritime Affairs, Benoni Urey, “we hope modities trading services.
Matadi port handles much of the transiting to recover our number one position soon”.
At this stage, the shareholders were the
manufactured goods destined for Kinshasa. The Taylor government has established the company’s directors and Thuthukani
Road and rail traffic between Matadi and Liberia Maritime Advisory Board,aimed at Investments, an employee’s trust and dis-
the capital are suffering from considerable the “promotion of the Liberian flag”. cussions were underway with a women’s
disruption. Because of the poor state of the investment group, Mthethwa said.
road, unmaintained for years, heavy goods The country has been an active shipping
vehicles take one or two weeks to cover nation since 1948 and during this period it The company’s coverage would extend to
the 350km stretch between the port and has earned respect in the international sea- the Eastern and Western Cape, Gauteng
Kinshasa. More than 150 lorries are cur- faring community. Liberia is statistically and Maputo. First-line agency represen-
rently lying abandoned on the road having ranked high among flag states whose casu- tation was planned for the Persian Gulf,
got stuck in pot-holes. alty records are consistently better than the Karachi and Bombay. (St 26/11)
world’s average.
The railway cannot fill the gap either since
ONATRA has a shortage of locomotives Such efficiency and expertise acquired ROADS AND RAILWAYS
in working order. (AFP 19/11) over the years have led to an appreciable
increase in shipping tonnage, making Angola
Liberia Liberia a competent shipping registry. (EA
1/12, WA 24/11) Large ship register p. 12938 A consortium led by the Portuguese rail-
Liberia has become the fifth African state way company (CP) is to invest $3m in
to be elected to the International Maritime Senegal rehabilitating the Malange rail corridor,
Organisation (IMO) Council along with sources in Lisbon said on November 29th.
existing members South Africa, Tunisia, The volume of trade in the port of Dakar
Egypt and Algeria. increased by 6.3% in 1996, according to The 420km network links Luanda and its
official statistics at the end of October. port to the town of Malange, the capital of
The election of the West African state, the the province of the same name (central
second largest flag state in the world, came From 5.667m tonnes in 1995 it went up to
6.028m tonnes in 1996. (MTM 7/11) Last north).
after some pressure on the International reference p. 13013
Maritime Organisation to change its rules According to a CP spokesman, the invest-
on membership. South Africa ment will be financed by Caixa Geral de
One month after Gerald Cooper’s appoint- Depositos (CGD), the foremost Portuguese
ment as Liberia’s permanent representative Dudula Shipping Company, South Africa’s financial group.
to the London-based IMO, he was elected first black-owned shipping company, has
been officially launched, according to Apart from CP, the consortium is made up
as head of the OAU group with the UN of two other Portuguese companies: Som-
specialised agency. He now plans to place Sithembiso Mthethwa, the chief executive.
ague (metallurgy) and Technocarro. (AFP
Africa at the forefront of world shipping. The Durban-based company into which the 29/11) Transport report p. 13084

mines will contribute 3,66m oz of 1997’s

4 Commodities
total supply of 4,77m oz.
This is welcome news for platinum indus-
try leader Amplats, which is spending
R1,5bn to push its annual production up by
sagged to current levels around US$387/oz 0,3m oz to 1,8m oz by 2001.
MARKET REVIEW from a June high of $497/oz. The JM report confirms much of the
Dynamics of Platinum Despite this, JM analyst Alison Cowley is reasoning lying behind the Amplats
sticking to her forecast in the Review that decision to expand and take advantage of
South Africa will increase its dominance the platinum price will range between forecast platinum shortages, particularly
of the world platinum market to 77% in $400 and $450 during the next six months. concerning the drop in Russian platinum
1997 from 68% in 1996 and platinum will exports.
retain its firm fundamentals despite Favourable market fundamentals for plati-
gold’s meltdown. num remain in place and Cowley believes With gold in the doldrums, South Africa
they will not be affected materially by the turns to platinum for a ray of hope.
Those are the findings of the latest assess- woes in southeast Asia. Amplats MD Barry Davison will stress to
ment of the platinum market by metal trad- stakeholders in his new networking role
ers Johnson Matthey (JM), who published That’s all good news for the South African the risks of oversupply.
the authoritative Platinum 1997 Interim platinum mines commented Financial
Review. Mail, which dominate world supply, World’s annual gold production is worth
accounting for 3,39m oz of the total 4,98m about US$24bn while platinum is only
The platinum price has maintained its pre- oz of platinum sold on world markets in about 7.5% of that at $1.8bn. Davison’s
mium above gold although the metal has 1996. JM forecasts the South African point is this is a small market taht could
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13264 – Africa Research Bulletin Commodities

OPEC
For the first time in four years, the
Organisation of Petroleum Exporting
Countries (OPEC) is to increase its
members’ production quotas. It will
increase its barrels-a-day production by
10% from 25.03m to 27.5m. The
decision is a victory for Saudi Arabia,
supported by Kuwait and the United
Arab Emirates, and in opposition to
the wishes of most member countries.
The ‘no’ lobby being most vehemently
supported by Libya and Algeria. Oil
prices fell slightly at the news, then
recovered to $18.02 a barrel on
December 1st.
(AFP 29/11, FT 2/12)

Gold—“Dead Capital”
(Johnson Matthey) Gold has been stripped of its financial
mystique. It is “highly unlikely” reserves
of the proposed European central bank will
Early December Prices Platinum Group Minerals be held in gold.
Latest Change (PGM) In Belgium, the Netherlands, Portugal
prices on Platinum Supply 1996 1997 and Australia, central banks already have
month (’000 oz)
Gold per troy oz. $288.05 ⫺24 sold some of their reserves. The Swiss
South Africa 3,390 3,660 National Bank has said it is mulling its
Silver per troy oz. 319.00p ⫹22 Russia 1,220 700
Aluminium 99.7% (cash) $1555 ⫺59 North America 240 270 own gold sales, while the German Bun-
Copper Grade A (cash) $1800 ⫺212 Others 130 140 desbank recently said it has been lending
Lead (cash) $526 ⫺72 Total Supply 4,980 4,770 gold.
Nickel (cash) $5970 ⫺315 Total Demand 4,960 5,090
Zinc SHG (cash) $1112.5 ⫺143 Given the imperial magnitude of central
Tin (cash) $5815 ⫹340 Palladium Supply 1996 1997 bank gold holdings, such disclosures have
Cocoa Futures Dec £1024 ⫺25 (’000 oz) put bullion markets under sustained press-
Coffee Futures Jan $1766 ⫺337 South Africa 1,690 1,750 ure.
Sugar (LDP Raw) $296.30 ⫹7 Russia 5,600 3,200
Barley Futures Jan £75.60 ⫺1 North America 455 600 Central banks hold about one-third of the
Wheat Futures Jan £81.90 ⫺2 Others 95 100 world’s total gold stockpiles, equivalent to
Cotton Outlook A Index 74.95c ⫺3 Total Supply 7,840 5,650 several decades of combined production.
Wool (64s Super) 390p ⫺38 Total Demand 6,170 7,440
Oil (Brent Blend) $18.24x ⫺2 Bars of gold have become “dead capital”
Rhodium Supply 1996 1997 because they earn no interest, said Adolf
Per tonne unless otherwise stated. p (’000 oz )
South Africa 359 367 Rosenstock, economist at the Industrial
Pence/kg. c Cents lb. x Jan. Bank of Japan.
(FT 7/12) Russia 110 55
North America 5 15 Interest-bearing securities like Treasury
Total Supply 474 437 bills have become as good as gold for cen-
Total Demand 461 449
easily be overwhelmed by increased (Johnson Matthey) tral banks and other institutions.
demand not related to market growth. Argentina’s central bank is the latest to
It is an issue that has dogged the fortunes reveal it has sold its gold reserves, and, as
of South African platinum groups since the about 3.5m oz a year is nearly 230 years the market considered the implications,
Merensky Reef was discovered in 1925. of reserves. gold sunk to a low of $829.15 an ounce on
As early as 1928 then JCI chairman Solly “There are no problems increasing output December 4th.
Joel was calling for production controls to in terms of the resource base but the world According to Johannesburg’s The Star,
be set up along the lines of the diamond market for platinum is only 5m oz a year. analysts are now targeting $290 as the next
industry. barrier and then, below that, a severe
“The key is to help that market grow,
Reason is the country contains massive which Amplats is doing through its R100m bounce down to $280 as the bottom of the
untapped platinum ore reserves and a large annual spending on marketing platinum downtrend. “Market sentiment is well into
chunk of the mineral rights to those jewellery and on scientific research into extreme territory,” said Smith.
reserves today vests in the State. platinum use. As the price of gold slumped to below
Says Davison, “Depending on what econ- “It is crucial that stakeholders and people $300/oz for the first time in 12 years,
omic parameters you apply in terms of cut- of influence in South Africa, like poli- South Africa’s gold mines, which have
off depths and prices South Africa has ticians, have a clear grasp of these dynam- already lost about 50,000 jobs this year,
around 800m oz of platinum not mined ics of the platinum business,” said Davi- were preparing for further cuts. (See Gold
whach at the current rate of production of son. (FM 14, 21/11) Wobbles, No 10, p. 13223)
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November 16th–December 15th 1997 Africa Research Bulletin – 13265

Coffee Withheld keting of the material. Unlike coffee and prices, which offered no incentive to
African coffee producers of the Inter cocoa, the cotton sector remains to be priv- increase cane production despite the poten-
African Coffee Organisation (IACO) who atised although the process has already tial.
met in Kampala in late November decided begun with the setting up of Sicot, a priv- The proposed glycol plant would source its
to withdraw 850,000 bags of coffee from ate company that picks and exports cotton feedstock mainly from small black-
the market between December and May on its own account. empowerment sugar farmers.
1998, in a move aimed at pushing up the For the moment Sotoco keeps the mon- Ngqula said a complete pilot plant,
prices of the commodity. opoly on buying cotton from small pro- incorporating the purification of the feed-
The Kampala figures are in addition to ducers. The government is planning to pri- stock as well as the glycols plant, was
earlier quantities agreed upon in London vatise the sector but in the short term will envisaged.
by members of the Association of Coffee continue to buy cotton to guarantee a mini-
mum price to producers. (MTM 21/11) “Potential operating and marketing part-
Producing Countries (ACPC). They have ners will be identified over the coming
decided to retain a total of 52.75m bags year.” (St 3/12)
of coffee. RUBBER
Coffee stocks are now put at 10m bags. General Sudan
Delegates to the Kampala meeting The implementation of a Standard African Nerves are frayed in the sugar industry,
expressed concern at the decline in coffee Rubber (SAR) is expected to hit the mar- with pressure mounting on the government
production in Africa over the last few ket by the end of 1998 and will provide a to probe hoarding by some merchants.
years. The drop was attributed mainly to benchmark for African producers, said Moreover, parliamentary deputies have
diseases, pests and poor government poli- Mapri Kpolo, Executive Secretary of the levelled corruption accusations during
cies. The meeting set up committees to Professional Association of Natural Rub- stormy debates in recent days. The western
campaign for increased production and ber of Africa, at a recent rubber conference regions of Darfur and Kordofan have seen
improved quality. held in Liverpool, England. The SAR widespread consumer boycotts, amid
Africa’s total coffee production has, how- would fulfil the same role as the standard demands that government taxes on sugar
ever, started picking up after suffering a rubbers such as Ribbed Smoked Sheet 1 are returned to the regional authorities, and
decline from a peak of 23.8m 60kg bags (SRR1) did in Asia’s markets by providing the issue is now dominating the economy.
in the early 1970s to its current levels. Pro- an interchangeable, quality product, he At the root of the problem is Sudan’s com-
duction was 15.5m bags in the 1995/6 per- said. New standards for African rubber plicated sugar distribution system. Regions
iod before rising by two million bags in would help remove the current 5 to 20% are allocated an agreed quota, priced
the 1996/7 season to stand at an impressive origin discounts applied to African rubber according to whether the sugar is destined
17.5m bags. as compared to Asian rubber. New rubber for industrial processing, commercial users
Projections for the 1997/8 season which tree clones are also being used in Africa, such as restaurants, the open market or
started on October 1st, put production at and some industrial players say the clones subsidised sale under a ration-book sys-
will generate higher yields in Africa than tem. But the cash-strapped government has
some 20m 60kg bags. they do in Asia—1,500kg per hectare/year retained 85% of the overall quota instead,
In the case of Uganda and Cote d’Ivoire, as compared to 1,200kg per hectare, and allocating it to favoured merchants, who
he said, projects to increase production had without the use of extra fertiliser. Mean- have engineered steep price rises and
already been established. Uganda, which while, Africa’s share of world rubber pro- diverted subsidised sugar to the open mar-
plans to raise its coffee output to nine duction is expected to increase from four ket. Supplies are also being exported to
million 60kg bags by the year 2000 is per cent currently to around 4.7% by 2000 Libya, South Africa and other African
replacing its ageing coffee trees with the and to 7.6% in 2020. In 1996, Africa pro- markets.
fast growing and high yielding clonal var- duced 290 thousand tonnes of rubber, and
iety. (EA 1/12) output is expected to top 308 thousand Snap taxes have also been levied on indus-
tonnes by the end of the decade. (IRD Nov) trial supplies: prices have risen 117% to
reach SD120 ($0.54) per kg. Industry’s
AGRICULTURAL quota is usually 8.5% that of any region’s
SUGAR total allocation: only half of this has been
COTTON supplied throughout the regions. Pressure
South Africa is growing at the ministry of finance to lib-
Togo The Industrial Development Corporation eralise the trade: economists say this
The government has decided that half of has unveiled plans to construct an R850m would stabilise prices and eliminate smug-
the net profits of the Togolese Cotton plant to produce ethylene glycol, propy- gling and hoarding on the parallel market.
Company (SOTOCO), a state company, lene glycol and glycerol from sugar. (AA 28/11)
will be distributed amongst agricultural
producers. In a declaration published in Khaya Ngqula, the chief executive, said
Togo Presse, the Agriculture Minister said that the plant would have a capacity of IN BRIEF
that the remaining 50% would be paid to 100,000 tons a year. It would generate net
foreign-exchange earnings of R450m a Agricultural loan: The National Bank of Ang-
the state in the form of dividends. The ola has granted $40m to businessmen to revamp
Minister added that “for the 1996 season year and directly create 6,500 new jobs. social and economic sectors. About $25m was
this will be a total sum of CFA1.1bn which The initiative had been approved by the granted to develop agricultural and livestock
will thus be redistributed amongst cotton IDCs board. programmes. (Angop 27/11: BBC Mon.)
growers”. The payment will be made Ngqula said South Africa exported about Cashew: The World Bank has reassured Moz-
through the associations that oversee mar- 40% of its sugar production at world ambique it will not interfere in its cashew pol-

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13266 – Africa Research Bulletin Commodities

icy again (p. 13194). A new Deloitte and Tou- Exclusive rights to Liberia’s mineral
che report advocates: keeping surtax at 14–20%; resources (covering an area of 112,000 sq BAUXITE
setting a minimum producer price of 4,500 met- km) are claimed by Liberian Resources
icais per kilo for two years, rising to Met 5,000 Guinea
thereafter. It estimates existing processing plants Corp (Liberesco), which is owned 60% by
capable of transforming 54,500 tonnes of nuts the government and 40% by Holistic A major overhaul of the bauxite industry
annually. It recommends planting 1.5m new Resources. The latter company is held by is to take place in Guinea shortly. It is the
cashew trees. Annual production is between Amalia through UK-based Commonwealth second largest world producer (after
35,000 tonnes (bad harvest) and 60,000 tonnes Gold (Comgold). This week, the company Australia) of bauxite, the raw material for
(good harvest). (Moz Inview) revealed that an agreement has been making aluminium which accounted for
Cereals: In Tanzania food scarcity has pushed reached for the banking consortium to over 85% of hard currency resources in
the price of staples—maize and rice—up 33%. invest an initial US$496m for a detailed 1996. The economic daily Les Echos said
(BT 21/11) in mid-November that the country wanted
geological audit of Liberia’s resources and
Coffee: The 1997/98 coffee campaign the first step in a redevelopment of the to increase bauxite’s added value before
(October–September) in the Central African country’s iron ore and diamond indus- exporting it, which could mean associating
Republic does not look too good, according to
tries. This investment is subject to receipt with new partners.
a recent statement to Reuters by Aline Songom-
ali of the regulatory organisation for agricultural of an acceptable strategic investment plan, The daily said that the government had
products, the ORCCPA. She indicated that pro- which Comgold is currently completing. asked the investment bank SBC Warburg
duction forecasts for the season were for 8,000 Final approval for this first investment is Dillon to advise on restructuring and priv-
tonnes, whereas the preceding season (1996/97) expected by early December, with a atising the mining sector. It hopes that pro-
reached 15,000 tonnes. This substantial drop in second tranche of $700m already planned.
production is attributed to “poor rainfall distri- duction by the Guinea Bauxite Company
bution in coffee-growing areas”. (MTM 28/11) The consortium will have a 25% stake in (CBG) will increase from the present
Liberesco. 640,000 tonnes to 1.1m tonnes. The cost
In Tanzania overall national output for 1997/98 of this growth is evaluated at $300m. CBG
is forecast by traders to reach at most 40,000
tonnes, down from 42,000 tonnes in 1996/97, is a joint company between the govern-
Prior to outbreak of civil war in 1989, ment and Halco: it includes Alcan
which already was a drop from the 1995/96 total
national output of 53,000 tonnes. (EA 2/11) Liberia was the second most important (Canada), Aloa and Reynolds Metals
iron ore producer in Africa, with the metal (US), Pechiney (France), Comalco
Olives: Morocco has appealed to the World accounting for almost two-thirds of the
Olive Council for help in extending areas under (Australia) and Vaw (Germany) amongst
olive cultivation, said the official agency MAP country’s export earnings. There were four its share-holders.
on November 7th. They would be extended from main iron ore producing mines: Bomi
415,000ha at present to 2m ha by the year 2007, Hills, Mano River, Bong and Mt Nimba. At the Friguia complex where bauxite is
which would bring annual production of olive Total ore reserves were estimated at 4,000 used to produce alumina, the government
oil to 1.6m tonnes instead of the current 450,000 tonnes at grades of between 30% and 67% is in disagreement with its partners who
tonnes. (AFP 7/11) Fe. The main orebody at Mt Nimba was are challenging receivership. Alcan and
Pineapples: Cote d’Ivoire’s annual production exhausted in 1989 but deposits have been Pechiney are amongst Friguia share-hold-
of pineapples amounted to 180,000 tonnes in identified in the Western area, located ers with Hydro Aluminium (Norway) and
1997 compared with 175,481 tonnes the pre- 20km away. The structure also extends Noranda (Canada).
vious season according to figures supplied by
the Central Organisation of Pineapple and into Guinea, where it hosts the 315m A bitter attack on some of the aluminium
Banana Producers and Exporters (OCAB). The tonnes Mifergui deposit (grading 67% Fe). companies that have dominated the bauxite
area used is estimated at 15,000ha and approxi- Collaborative plans between the two and alumina industry in Guinea has been
mately 60% of production is carried out by governments to mine this deposit, using made by Fassine Fofana, Minister of Natu-
small growers. the existing Liberian infrastructure, have ral Resources and Energy.
In Europe, imports are ensured by a group of been on hold since the outbreak of the
commission importers, recently cut by OCAB to civil war. “The collapse of Friguia is a direct conse-
nine. The cut was to improve cohesion amongst quence of a lack of investment and interest
the commissioners who sell the fruits to the by its controlling shareholder and the
highest bidders. OCAB invested FF12m in mar- Liberia’s other mineral resources include squeeze conducted in collaboration with
keting Ivorian pineapples in 1997. (MTM 21/11) alluvial diamonds and indications of kim- the institution providing financing to Frig-
berlites, although very little geological uia,” he insisted.
work has been done. There is also believed
MINERAL to be potential for oil offshore, although Mr Fofana said other investors were keen
GENERAL only seven wells have been drilled to date, to play a part in Guinea’s industry. African
and there are reports of gold discoveries in Investments International, a specialist con-
Liberia the east of the country. As a start to its sultancy, was advising the government on
investigations in Liberia, Comgold has Friguia. It was still hoped Friguia would
South Africa’s Amalia Corp reports that a expand annual capacity from 640,000 to
consortium of bankers from the Middle retained Professor Morris Viljoen and
1.1m tonnes with a $300m investment.
East, US and Europe have agreed to inject geology department staff from the Univer-
up to US$7.5bn over the next ten years sity of the Witwatersrand, South Africa, to Also, SBC Warburg Dillon Read was
into development of Liberia’s mineral instigate a preliminary ground survey of advising on the restructuring and privatis-
resources. Howver, few details have been the country. SRK has already undertaken a ation of Guinea’s mining sector. Mr
published, most notably the members of preliminary evaluation of Mt Nimba using Fofana said mining projects involving
the consortium or detailed spending plans, historical documentation. (MnJ 21/11) Ama- $10bn were on the drawing board. (MTM
reported Mining Journal. lia’s Monopoly p. 13126, Iron Ore p. 13198 21/11, FT 19/11)

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right to develop the Konkola North

COAL deposit, which ZCCM privatised in 1996.
South Africa
As economic, export-quality reserves years will see a decline in South Africa’s The agreement covers the purchase price,
decline, control over the South African output of better quality export coal. the capital expenditures that the consor-
coal industry is being concentrated in the tium will be required to invest, the level of
Amcoal and Ingwe have already made debt to be assumed and the residual equity
hands of three major producers, Amcoal, major investments overseas. With Minorco,
Ingwe Coal and Lonrho. In 1997, these Amcoal has set up Ammin Coal to be held by ZCCM. There will also be
companies could account for about 78% of further considerations to be paid that will
South African coal sales, excluding coal Investments and has committed more than
US$145m to a project in Colombia. be based on the future price of cobalt.
mined by chemical producer Sasol and the Details still to be agreed include environ-
steel producer Iscor for their own use. Ingwe is active in South America,
They could also be responsible for Australia and Indonesia, and is also mental and social issues. The consortium
approximately 85% of coal exports. In looking at China. notes that discussions with the Zambian
1996 exports totalled 61m tons and run-of- Government are expected to continue
mine (ROM) production reached 261.5m Meanwhile, although South African coal “over the next few months” and that the
exports have increased by 21.4% over the
tons, of which some 205m tons a year was past five years, future growth will depend transaction will be closed “shortly there-
of saleable quality. Ingwe has a 60m tons after”.
a year capacity and exports about 41% of on increasing port capacity. There are plans
its production. Amcoal produced 46m tons for a second export terminal, primarily for Under the terms of the agreement, none of
the smaller exporters not able to gain the financial details have been released at
in 1996, with about 30% going for export. access to RBCT, and Spoornet, the railway
Sasol was the third largest producer, with authority that will carry the coal, has a five- this stage. The general consensus among
43m tons and while it consumes most of analysts following the lengthy negotiations
its output, it too is looking at the export year horizon of 75m t/y and a long-term
forecast of 84 m/ty, the upper limits of port is that the Zambian authorities had been
market and expects to export 1m tons this hoping to receive US$300m but that the
year and 3m t/y by 1999. capacity without expensive greenfields
expansion. The proposed second export coal consortium had been offering only $220m ,
Lonrho has become a more important facility, the South Dunes Coal terminal, plus a commitment of $750m in capital
player following the recent acquisition, by could be in operation within three years, expenditure and $250m in social obli-
its 61%-owned coal subsidiary Duiker according to industry sources. gations and the assumption of debt.
Mining, of Tavistock Collieries from JCL.
Tavistock’s ROM production is Also, a majority stake in the power
approaching 14m t/y and it has a 14.2% division of Zambia Consolidated Copper
share (9t/y) of the export capacity at the Mines has been acquired for US$50m by
Richards Bay Coal Terminal (RBCT).
Duiker produces around 9m t/y of coal. MPI Ltd and British electricity utility
National Grid plc. The partners will hold
Duuiker’s chairman, Hugh Stoyell, said 40% each in the Zambian utility. (MnJ 14,
recently that Tavistock would not be the 28/11) See map showing mines No 9 p. 13197
end of the acquisition trail: “It could be
the start . . . but not in this country.” South
Africa’s market share is being eroded as GOLD
coal production elsewhere increases and
Mr Stoyell believes the next 10 to 20 Ethiopia
(MM Dec)
The privatisation of Ethiopia’s only gold
producing mine has opened the door for a
major boost in income from the country’s
under-exploited mining sector.
COPPER Ethiopia’s only producing gold mine,
Legadembi, has been privatised in an esti-
Zambia mated $172m deal, which is reckoned to
One of the main remaining elements in the be the country’s largest privatisation to
privatisation of Zambia’s important copper date.
mining industry has finally fallen into The deal strengthens the financial muscle
place, as the Kafue consortium agreed
terms for the acquisition of Zambia Con- of Mr Mohamed Hussein Alamoudi,
whose National Mining Corporation
solidated Copper Mines’ (ZCCM) Nkana (NMC) wrested control of the mine from
and Nchanga divisions (Package A). stiff foreign competition. It is believed
Nchanga is ZCCM’s largest producer of (AA)
copper and cobalt, and the two divisions about 12 other companies tendered for
into nine packages, most of which have control of the mine. NMC has the licence
produced 171,666 tonnes of finished cop- to operate it for 20 years and exploration
per in the year to March 1997, accounting now been sold.
for more than half of the group’s output of The Kafue consortium combines an rights for an 85 sq km area surrounding the
320,446t, plus 4,252t of cobalt out of the impressive range of geographical, techni- existing mine. The Ethiopian government
retains a 2% stake in Legadembi and will
total of 5,126t. The agreement also covers cal and financial experience, comprising enjoy a 35% profit share from the gold
the Chambishi cobalt plant and the Ching- Avmin of South Africa; Noranda of Can-
ola refractory ore dumps (Packages G and ada; Phelps Dodge of the US; and the produced at the mine.
L, respectively). ZCCM’s existing oper- Commonwealth Development Corp., a UK The Ethiopian Mineral Resources Devel-
ations and associated assets were grouped government agency. Avmin also holds the opment Corporation was previously
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operating the mine which came into full dedicated on a first-refusal basis to Anglo-
production in 1990, although it has not gold. It will be a self-administered, free-
been running at its designed capacity. standing international gold operating com-
Legadembi is estimated to have 1.5m to pany,” said Julian Ogilvie Thompson,
2m ounces of proven open pittable Anglo’s chairman.
reserves, and the government estimate of Minorco, Anglo’s offshore commodities
the total resource is between 60 tonnes and interests, would be approached to include
200 tonnes. its gold operations and prospecting activi-
Under government control Legadembi has ties in North and South America.
been producing about 100,000 ounces a Godsell stressed that management con-
year but the government claimed in the tracts would be cancelled and Anglogold
run-up to the privatisation sale that under would have independent directors. Unec-
private control the output could be quad- onomic shafts and mines would not be
rupled. included in the new company and would
Another government projection is that if be closed in a rationalisation drive aimed
$150m is invested in gold exploration, at bringing cash costs down to $255 an
Ethiopia’s annual gold production could ounce when the JCI mines were included.
approach a 30-tonnes-a-year level. Rift Anglo’s interim results were over-
Resources Toronto, a Canada based min- shadowed by the restructuring. It recorded
eral exploration and development com- a 0.5% rise in headline earnings to
pany, is seeking gold targets in the 1.5m R2.45bn, but total net earnings were up
to 3.0m ounce range and holds three explo- 29.9% to R3.86bn. Dividends a share fell
ration licence areas in Ethiopia amounting 3.6% to R293.86.
to 104,000ha. A further 85,000ha, com-
prising four licence areas, remain under JCI, South Africa’s first black-owned min-
application. ing house, would swap its premium West-
(FM 28/11) ern Areas and HJ Joel gold mines with
With the acquisition of the Moyale project Anglo American in return for Anglo’s
in southern Ethiopia in December 1996, 26.1% of the British group Lonrho.
Rift has a significant advanced property
with an existing gold resource previously It said the deal was worth R2.6bn and
outlined by the Ethiopian Institute for Geo- another R1bn would be paid in cash, sub-
logical Surveys (EIGS) of about 213,700 ject to the approval of the European Com-
tonnes at an average grade of 7.4g/t of mission (GC). (St 3/12) Goldco p. 13233
gold. According to Rift Resources, assay Mine listing by output p. 13091 Shockwaves
values up to 215.0g/t of gold have been p. 13223
obtained from grab samples in the area.
(AB Dec) Survey p. 12985B PETROLEUM/GAS
South Africa (FT 26/11) Egypt
Anglo American has claimed back the title in Lonrho. The group would then seek to The Italian group Edison, the UK’s Brit-
of the world’s largest gold company after acquire 100% of these mines at a later ish Gas and the Anglo-Dutch Shell on
announcing it would rebundle its gold date, Godsell said. November 20th signed a contract to supply
assets into one R20bn listed company with gas extracted from the Rosetta concession
Vaal Reefs as the vehicle. Anglo as a whole would concentrate its in Egypt, announced Edison in Milan. Gas
commodity operations into various holding sales to the Egyptian General petroleum
This company would be called Anglogold companies with platinum in Amplats, coal
and have an annual gold production of Co will start in January 2000 and will
in Amcoal and gold in Anglogold. It would amount to 2.5bn cubic metres of gas per
5.7m ounces. buy De Beers’ three percent in Amplats year. No financial details were given. The
A few weeks previously, Gold Fields and and sell its seven percent stake in De Beers Rosetta off-short concession covers an area
Gencor said they would combine all their to Anamint. of 3,730 sq kms, and is situated in the Nile
gold assets into Goldco, creating the then The new Anglogold would include a Delta. (AFP 20/11)
world’s largest gold company. (p. 13233). merged Vaal Reefs (South Vaal and East
“South African gold companies have been Vaal), Western Deeps, Elandsrand, Free- Nigeria
written off as dead internationally, but we gold, Ergo as well as the JCI mines West-
ern Areas and HJ Joel. Finance Minister, Anthony Ani, has re-
are creating a merger of quality assets with asserted his authority over the Nigerian oil
its feet firmly planted on African soil. We Anglo and De Beers’ interests in Nava- industry with a promise of more funding
are seeking to create a gold company of chab in Namibia and Sadiola in Mali for oil exploration and production in 1998.
the 21st century,” said Bobby Godsell, the would be included, and so would Anglo’s, But leading oil-producing companies such
chairman of Anglogold. Amgold’s and De Beers’ gold mineral as Shell, Chevron and Mobil are still wran-
JCI’s shares in gold mines Western Areas rights in South Africa, including Western gling with the Nigerian National Petroleum
and HJ Joel would also be “injected” into Ultra Deep Levels. Corporation (NNPC) over its due contri-
this group in a swop for Anglo’s interests “The remainder (of mineral rights) will be butions to oilfield spending.
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November 16th–December 15th 1997 Africa Research Bulletin – 13269

ment support for the construction of a commence mining operations by the end of
Libya West African gas pipeline to serve Ghana December 1997.
LASMO, the independent oil and gas and other markets in the region; in the The vessel is equipped with a second-generation
explorer, provided a boost for the meantime it is one of Nigeria’s leading underwater crawler mining tool—the NamSSol
Gaddafi regime with a substantial oil gas flarers. 0 designed for Namco by Dresser Industries’
find, estimated at “several hundred subsidiary, Subsea Offshore. With the unique
million barrels of oil” in Libya. The company has begun work on the design features of the remote controlled
second, $80m–$90m, phase of Escravos. NamSSol, Namco is confident it will be able to
(AA 14/11) meet its target diamond output of 150,000–
Tunisia 160,000ct/y.
British Gas, which is the largest foreign In 1996, Namco’s bulk sampling programme
operator in the hydrocarbons sector has established inferred reserved of 1.9m carats in
the Koichab prospect, which covers less than
since 1996 earmarked around $650m to 5% of Namco’s 520sq km Luderitz bay con-
exploiting the gas deposit of Miskar in the cession. (MnJ 21/11)
Gulf of Hasdrabul, about 100kms from the
shore. At the same time, new fields have In South Africa only 6% of locally produced
been opened, notably at Sidi Kilaini, Ezza- diamonds are cut and polished domestically. In
1996 130m carats were sold world wide in the
ouia and Cercina, which will ensure the rough for about US$7.6bn. After polishing they
More drilling is planned in the area,
called the Elephant field, to prove the country’s self-sufficiency in gas and pro- were sold for about $14bn.
extent of the “substantial column” of vide a surplus energy balance at least until
2001. Around 50 oil exploration licences Laser Optech has spent R7.5m developing state-
oil encountered in a large structure. of-the-art laser technology for diamond-cutting
Preliminary estimates suggest that the were in force over the whole country at the and has 25 machines sold worldwide. The com-
field could cover an area of more than beginning of 1997. The total amount of pany has a bold plan to create thousands of jobs
20 square miles. investments is around $100m. Moreover and double South Africa’s diamond revenue by
The discovery is 40 miles southwest of the authorities have announced the promul- creating a massive diamond polishing industry
an existing pipeline which will provide gation in 1998 of a new mining code in South Africa. It hopes De Beers “will come
an export route for the oil to the which will promote gas and oil activities. on board”. (FM 28/11)
Libyan coast. Lasmo estimates (JA11-17/11)
development costs will be around $1 a Phosphates: Togo’s key economic sector, the
barrel but, under a production-sharing phosphate industry is now in the process of
agreement, is expected to surrender IN BRIEF being sold off as part of a World Bank-spon-
half the oil to the state oil company. sored privatisation programme. In 1996 Togo
Diamonds: In Angola Ocean Diamond Mining was the world’s fifth largest phosphate exporter,
At present, Lasmo has a third interest (ODM), a Cape Town-based group which mines with 2.8m tonnes a year produced from two
in a Libyan consortium that also around the Penguin islands in Namibia and the deposits in the south of the country.
includes Agip of Italy and Korean South African offshore, has gained its first
partners. exploration rights. It is one of the few industries in Togo, the other
(D. Tel 31/10) Under a joint venture with Angolan gem paras- main ones being cement manufacture, handi-
tatal Cimader, ODM has a 51% stake in the Dala crafts, brewing and textiles. The industrial sector
concession, covering 22,500 sq km of Lunda Sul contributes about 18% of GDP and employs
and Moxico provinces; these contain several riv- about nine per cent of the workforce.
Although Nigeria is still producing at rec- ers with alluvial potential and the diamond-bear- Phosphate exports represent 40% of Togo’s total
ord levels close to 2.4m barrels a day, ing Colonda formation. ODM expects to spend exports. The phosphate ore is mined and pro-
spending cuts are certain to result in cut- $1.5m during the initial three-year exploration; cessed by the national phosphate company,
backs in capacity in 1998. besides the return on equity, it gets a 5% man- Office Togolais des Phosphates (OTP), which
agement fee on any revenue. has its own oceanside wharf for shipment.
Speaking at the commissioning of Chev-
ron’s $550m Escravos gas project, Ani The company projects 1997/98 production at Kpanlou Patasse, OTP’s director general, says
55,000 carats; most will come from its Namib- estimated reserves, mined at 2.8m tonnes a year,
said he was planning ‘to improve funding ian mining ship, which uses ‘airlift’ tech-
of the oil industry so as to boost crude oil will last 20 years. There are further deposits of
nology—cheaper, if less productive, than seabed phosphate which contain carbon which have not
production’. But he would not be drawn on crawlers and drill systems (see below).
whether the NNPC would be be in a pos- yet been exploited. (World Report)
In the Democratic Republic of Congo official
ition to release any more than this year’s exports of diamonds have risen to US$178.3m Petroleum: The government of Uganda has
reduced cash-call budget of $2.05bn, for 8.6m carats during the period June–October signed an agreement with an Australian firm,
which was less than two-thirds of the com- 1997. Most diamond production comes from the Hardmann Petroleum Uganda Ltd, for explo-
panies’ demands. Eastern Kasai region (Mbuji-Mayi) and are ration of petroleum on the northern Lake
mined by the Belgian-Congolese company Albert basin.
The Escravos project produces 145m cubic MIBA. (AFP 19/1)
feet a day of dry gas and 8,000 barrels a The Australian firm becomes the second organi-
For Namibia the first marine diamond pro- zation to contract petroleum exploration along
day of liquefied petroleum gas. But it duction vessel commissioned by Namibian Min- the Lake Albert basin. Heritage Oil and Gas Ltd
makes little impact on the problem of the erals Corp. (Namco), has been fitted up in the of UK signed a similar agreement in January
flaring of gas associated with oil pro- UK port of Hull. The vessel is scheduled to be 1997. (p. 12908). (R. Kampala 26/11: BBC
duction. Chevron argues for more govern- deployed over the Koichab prospect in time to Mon.)

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13270 – Africa Research Bulletin Industries

minerals giant Billiton propose to erect a

5 Industries
$1.2bn state-of-the-art aluminium smelter
in Mozambique. Its entire production
would be exported, and its production
costs would be among the lowest in the
world.
two months, bringing the total since April
GENERAL 1994 to more than R40bn, says research The IDC and Billiton are prepared to each
and consulting firm Business Map. big put up 2.5% of the financing, and they are
COTE D’IVOIRE looking for international partners to pro-
players have been PG Group, Mondi,
The government wants the country to Sappi and Anglovaal. vide the rest. Billiton already operates one
become an industrialised one “in the space of the world’s biggest and most modern
of one generation”. To achieve this result, Also in the pipeline are mining projects aluminium plants in South Africa.
the country is relying on its position as the worth more than R65bn—including
intended projects worth R50bn, acqui- Another IDC project involves using mag-
biggest world producer of cocoa and its netite from South Africa and natural gas
desire to treat half of its production itself sitions and new mining developments
worth R12bn and exploration worth from Mozambique to produce steel at a
before the year 2000. On November 27th plant near the port of Maputo, Mozam-
the head of state, President Henri Konan R2.5bn, reported the Financial Mail.
bique. The magnetite comes from a large
Bedie, inaugurated CEMOI-CI, a chocolate Most of the activity involves offshore South African copper mine not far from
manufacturing factory in the Yopougon funds by companies such as Anglo Amer- the Mozambique border, but it has not
industrial zone. It is hoped that the factory ican’s Minorco. Most schemes are in Latin been beneficiated into steel for want of a
will grind 60,000 tonnes of cocoa beans America where South African companies suitably priced fuel. This is now available
for the present season and 120,000 tonnes are bidding for stakes in large privatised following the recent discovery of Mozam-
in the year 2002. The government is also mining companies. Anglo and its subsidi- bique’s Pande gas field.
intending to develop the hydrocarbons aries are planning investments worth more
sector very rapidly and to supply West than R22bn there. The IDC is studying projects for fertilizer
Africa from the beginning of the next cen- production in Mozambique, iron and steel
tury. Production already covers national In Africa, most developments are at the in Zimbabwe, agribusinesses in Namibia
needs. exploration stage. The open cast nature of and various small business initiatives in
most mining on the continent has resulted Lesotho.
Small and medium-sized businesses— in modest investment commitments so far.
which account for 86% of business but Cooperation with its six neighbours, four
only contribute 18% of GDP—will be “Outside of mining and oil exploration, of which are landlocked, is vital. Other
called on to contribute: the government Africa still holds little attraction for South examples of cooperation include electricity
intends to make their contribution up to African companies, on the whole,” says supply agreements, that will allow utiliz-
40% of GDP. Business Map. “In fact there is a sense of ation of the region’s generation capacity to
a slowdown in African investments after be optimally utilized across borders, and a
The Cote d’Ivoire wants to double its an initial rush of activity, especially by
investment rate from 15% to 30% of GDP new initiative to establish a regional set-
retail companies.” tling house. The latter project is supported
according to Prime Minister Daniel Kablan
speaking at the opening of the Investment Globalisation of the South African econ- by the World Bank on the grounds that it
Forum held on November 25th–28th. He omy has gathered pace over the past few will promote trade within the region.
pointed out that the rate had already more years in spite of exchange controls
reported Business Map director Jenny Car- On the domestic front The Star reported
than doubled since 1993. Mr Duncan felt that the franchise industry is poised for
that future growth would come from the gill.
expansion. The franchise industry is
private sector where the investment rate “What we are seeing is a natural expansion expected to grow by 40% and generate an
would increase from 10% in 1997 to 26% of South African companies offshore annual turnover in excess of R21bn within
of GDP by the year 2000. He said that the because of limited opportunities at home. five years, Noel O’Connor, the chairman
country intended to attract 1% of the world If there was a sharp drop in business con- of the Franchise Association of Southern
total of direct foreign investment between fidence, there could be more distress relo- Africa (Fasa), told The Star. He said that
2000 and 2003 representing an annual cation of companies,” Cargill says. would increase the industry’s contribution
amount of $3bn. To give an idea of how to the gross domestic product (GDP)
ambitious the Ivorian programme is, direct According to the International Herald
Tribune South Africa’s state-owned Indus- beyond the present 9%. (FM 14, 21/11, HT
foreign investment into the African conti- 17/11, St 19/11) Olympic Bid p. 13200B
nent represented $4.7bn in 1995. The auth- trial Development Corporation is breaking
orities in the Cote d’Ivoire announced that with tradition to back massive projects in
investment—both national and external— neighbouring countries. On this score, it ALUMINIUM
for the first 11 months of 1997 reached has been accused by some of neglecting
CFA245bn, double the 1996 figure. (MTM the principle that charity begins at home, MOZAMBIQUE
28/11, Frt 28/11) but the IDCs chief executive officer, Representatives of the Mozambican, South
Khaya Ngqula, points out, “Our projects in African and Swazi electricity companies
South Africa neighbouring countries are there because say that international investors have agreed
South African companies have been they make economic sense.” to finance the construction of new elec-
involved in offshore acquisitions or merg- The biggest is the Mozal project, in which tricity lines required for supplying the
ers worth more than Rand 8bn in the past the IDC and South Africa’s multinational power for the Mozal (Mozambique Alu-
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November 16th–December 15th 1997 Africa Research Bulletin – 13271

minium Company) aluminium smelter that on a steel processing factory, at a cost of through its existing network of breweries
will be built in Maputo. The announcement dirhams 300m. The factory will be built in located in Swaziland, Lesotho, Bots-
came in a communique, following a two- Casablanca over an area of 9ha and will wana, Zimbabwe, Mozambique, Zam-
day meeting between EDM (Mozambique come into operation in May 1998. (AFP bia, Tanzania, Kenya and the home base
Electricity Company) of Mozambique, 12/11) South Africa.
Eskom (Electricity Supply Commission) of The EIA has approved the investment
South Africa and the Swazi Electricity Senegal
through a joint venture between South
Board with investors. The new power lines Construction: The Malaysian company Africa Breweries International Africa for a
will require an investment of about Halaman Perdana SDN has signed an 49% holding including management con-
US$130m in a project that will be run as agreement with the Senegalese govern- trol—and the International Beverage Cor-
a joint venture known as Motraco between ment to create an industrial estate near the poration, an organisation owned by Ethi-
the three electricity companies. The plan is capital Dakar. The company has procured opian nationals with a 51% stake, for the
for two lines from South Africa to Maputo, a 525 hectare site in the industrial free construction of a greenfield brewery close
one of which will cross Swaziland. The zone for US$27m. Considered a good to the city of Addis Ababa.
distance involves is about 600 km. Build- price, a clause had to be introduced into
ing the lines, which will carry 400 MW, the contract to prevent any speculation. The commissioning of the brewery, which
should start in 1998 and be completed by will have an initial capacity of 500,000
the year 2000, employing about 300 work- The project, which will be promoted by the hectolitres a year, is scheduled for May
ers. Malaysian company and will include 1999. A total of 500 new jobs will be cre-
investors from Taiwan, Indonesia, North ated by this investment, whilst a multiplier
The undertaking is estimated to cost and South Korea and Japan, involves the effect attributable to the creation of new
$1.2bn and will generate a significant part construction, within the zone, of industrial, jobs at distribution, supplier and retail
of Mozambique’s gross domestic pro- administrative, commercial and residen- level should boost the number of
duction during the years of its implemen- tial buildings. additional job opportunities to about 5,000.
tation. Mozal is expected to create 4,000
jobs. (R. Maputo 27/11: BBC Mon.) Contract Already the investment projects, costing a SAB has also announced the purchase of
p. 13129 total of $22m and creating 1,155 jobs, have a 40% share in Uganda’s Nile Breweries
been registered. According to Le Soleil, Limited through the Africa division of
this shows the interest Senegal is generat- SAB International. The acquisition, which
COMPANY BRIEF ing under the “Clinton initiative”, which is effective from November 1998 was paid
Algeria seeks to develop US–African trade. (AFP for in cash amounting to $29m and,
12/11, LS 11/11) according to the terms of the agreement,
Electronics: The South Korean firm San- SAB is to assume management responsi-
sung is to open a colour television South Africa bility. The brewery at Tinja recently more
assembly plant in partnership with a priv- Breweries: The South African Breweries than doubled its capacity to 750,000 hl a
ate Algerian enterprise, Sentrax, at the (SAB) on November 13th said its Chinese year. (AB Dec).
beginning of 1998. The partnership con- joint venture, China Resources Enterprises Clothing: Clothing exports were up 50%
tract signed between Sentrax and Samsung Beverage CREB)—in which SAB holds a in the first half of 1997, compared with the
Electronics, provides for the establishment 49% interest—has purchased a 90% stake first half of 1996, Paul Theron, art execu-
of an electronic articles assembly factory in the brewing assets of the Sichuan Yatai tive director of the South African Clothing
at Bordj Bou Arreridj (in the east). The Brewing Company for US$10.8m. Federation (Clofed) told The Star.
infrastructure is 60% complete, and the
first articles to be made are Samsung tele- Through CREB, SAB had, over the last He estimated that the value of exports for
visions to be assembled from imported two years, acquired joint control of three the full year could be Rand 800m–R1bn.
kits, followed by a whole range of elec- other major breweries serving the province Turning to illegal clothing imports, Rich-
tronic products made by the South of Liaoning; the two breweries in Sheny- ards believed there were definite signs that
Korean firm. ang City and the Dalian brewery in Dalian. customs officials’ actions were having a
SAB also has an interest in the Shenzen curbing effect. (St 3/12)
Samsung, which represents nearly 28% of C’est Bon Food and Drink Company in the
South Korea’s turnover is actively prepar- Guandong Province. IT: Black business in South Africa has
ing its establishment in the country. More secured a majority stake in the country’s
than $2bn worth of investments are The new brewing concern, with a capacity leading information technology group, fol-
expected in five years in various econ- of 700,000hl a year, now marks SAB’s lowing the separation of the African and
omic sectors. partnership in four breweries in China with international interests of Persetel Q Data.
a total brewing capacity of over 150m hl The new black-controlled company, PQ
Another industrial partnership accord has a year. (SAPA 13/11: BBC Mon.)
also been concluded between BYA, a priv- Africa, will absorb the local operations of
ate Algerian company specialising in the South African Breweries is investing both Persetel and Q-Data, South Africa’s
production of electronic articles, notably nearly US$70m in two separate deals in two leading information technology com-
television and satellite dishes, and the Ger- Africa. Firstly a new brewery will be built panies which merged in August.
man firm Katherin, a subsidiary of the in Addis Ababa in a joint venture with the
Ethiopian Investment Authority (EIA), A consortium of black business groups
Japanese Sony, for a project to set up a will be offered a stake of 50% plus one
production unit at Arzew. (MTM 21/11) and secondly SAB is acquiring a 40%
stake in Uganda’s Nile Breweries Limited share in PQ Africa for R2.15bn ($443m),
a discount of at least 20% to the directors’
Morocco for $29m in cash.
estimate of market value. Payment will be
Steel: The Spanish group Gonvari, on SAB has already established itself firmly staggered to spread the financial burden for
November 12th, started construction work within the sub-Saharan Africa region the new owners. (FT 19/11)
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13272 – Africa Research Bulletin Industries

Investment Manager: Guinness Flight Tunisia

Hambro, a leading British investment Cigarettes: The American cigarette firm
STEEL
management company, will open a Cape R.J. Reynolds International (RJRI), in mid- Mozambique
Town office early in the new year as a November signed a partnership agreement
gateway to business throughout Africa. with the Tunisian tobacco and match com- South Africa’s Industrial Development
The company said it planned to make the pany to produce and market cigarettes in Corporation (IDC) and the US gas power
most of the increasingly liberalised South Tunisia. company, Enron, say they are broadening
African economy. (St 3/12) According to the agreement, RJRI has built the scope of their existing agreement on
Property: Immorent, a German property a new factory at a cost of around $5.7m in the development of an anchor project for
developer, has pledged to invest R500m a the region of Kairouan, called RJ Reynolds the Pande gas in Mozambique’s southern
year in prime leisure and commercial pro- Tunisie. This unit, which will employ 100 province of Inhambane, about 600km
perty in South Africa. people will produce and market two of its north of Maputo, reported Mozambique
biggest brands, and three Tunisian brands. Inview.
The German developer made its first foray The tobacco factory of Kairouan produces
into the Cape Town tourist market, buying 220m packets of cigarettes per year, and
employs 750 people. (MTM 21/11) The initial project, which contemplates the
a majority stake in the newly opened Villa production of Direct Reduced Iron or Hot
Via Hotel in Granger Bay next to the Vic- Zimbabwe Briquetted Iron, based upon the supply of
toria & Alfred Waterfront. gas from Pande Field, will be taken a step
Ferrochrome: A massive decline in the
The company has taken the strategic world market price and the under-perform- further, ultimately manufacturing steel
decision to invest half its yearly invest- ance of the Zimbabwean industry has slabs, a semi-finished steel product. The
ment income in South African property. spurred major restructuring at Anglo Amer- production of steel slabs, from what is now
That could be R500m or more a year. ican’s ferrochrome subsidiary, Zimalloys. the Maputo Steel Project, will utilise com-
petitively priced electrical power from
Thomas Fast, Immorent’s marketing direc- The 390-strong workforce at the north Cahora Bassa dam in Mozambique’s
tor, said Germans were bullish on the Dyke mine is to be slashed to 41. Only 67 northwestern Tete province, and will add
South African economy. Many were of the redundant workers are to be relo- further value, resulting in an economically
scared that European monetary union cated to other company operations. Output more viable project.
would dilute the strength of the German has been suspended at the Great Dyke II
currency, and were looking to put their and Inyala chrome ore mines.
cash into another currency. The Maputo steel project envisages pro-
The shake-up is the result of: increased duction of between 3m and 3.4m tonnes of
“We see very good value in South Africa,” borrowing, at Z$326m: a 61% increase in steel slabs per annum for export from the
Fast said. (St 3/12) local electricity costs in the last two years; port of Maputo. Construction will begin in
and high inflation due to an overvalued July 1998, with start up scheduled for Jan-
Tanzania Breweries: Tanzania Breweries Zimdollar (p. 13244B).
Limited has announced the start of an uary 2001. Combined investment for the
But the key factor is a world market glut integrated project will be nearly US$1.6bn.
expansion programme that involves an out- of alloys in 1997 from China and Russia:
lay of US$65m (about Tsh 39bn) in civil prices for Zimalloys’ low carbon ferroch-
works and machinery. rome have tumbled from $1.10/lb to below Plans were given a boost when the major
$0.90/lb. Technological gains at the Gweru Swiss trading group, Duferco, said it might
Management of the country’s leading invest in the scheme.
brewery has signed contracts with Ger- refinery will keep output at current levels
man and Italian firms for construction of of 40,000 tons per year. (AA 28/11) New
a brew house in Dar es Salaam and instal- investment p. 13238 In addition, Financial Mail reported, if
lation of a new packaging line at its plant anything gives the imprint of reality to
in Mwanza. POWER South Africa’s JCI’s US$504m hot
briquetted iron (HBI) plant at Beira, Moz-
In June TBL disclosed its plan to double Namibia ambique it is the announcement that it has
the production capacity of both Dar es The French group Cegelec is going to be sold forward contracts to major Far East
Salaam and Mwanza plants. part of a consortium which will build a trading houses.
The company’s executive director, Dan 735-kg long 400,000-volt high-tension line
Niemandt, told Business Times that a Ger- in Namibia. The contract is worth 450m About 1.5m tons of our projected 2.5m t/y
man firm, Zeemin, will supply the brew francs. HBI product has already been presold from
house unit, now under fabrication, at a cost The line will become operational between 2001 onwards to buyers in Japan and Tai-
of US30m. May 1999 and May 2000. It will constitute wan, while options to take up the balance
the Namibian part of the South Africa- of 1m t/y have also been signed by pro-
He said the packaging plant for Mwanza Namibia interconnection and will be part spective buyers.”
branch will be supplied by an Italian firm. of the Southern Africa power network
Commissioned in October 1995, the brew- being built by the countries of the Southern
ery has an annual production capacity of JCI’s pre-project is also being buttressed
Africa Development Community (SADC), by its decision to form a joint venture with
280,000 hecto litres. the group said in a communique. South Africa’s KBH Metals, one of the
Meanwhile, TBL has started the process to Cegelec (Engineering sector and Alsthom largest independent scrap dealers in the
be listed on the Dar es Salaam Stock Alcatel Systems) will be responsible for Southern Hemisphere which has an estab-
Exchange in the first quarter of 1998. research, supplies and assembly. (AFP lished customer base in the Far East. (Moz
(BT 21/11) 25/11: BBC Mon.) Inv, FM 21/11) Beira Iron Project p. 13163

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November 16th–December 15th 1997 Africa Research Bulletin – 13273

est of 2% and repayment over 25 years after

6 Economic Aid
eight years grace. Dirhams 7m from the OPEC
fund for agricultural development. The Kuwaiti
Fund has awarded a loan of $20m to complete
the Dchar El Oued and Ait Messaoud dams. The
loan is over 20 years with interest of 3%.
Mozambique: A $2.5m long term participating
EUROPEAN UNION (EU) NATIONS OVERSEAS loan from the Commonwealth Development
Corporation (CDC) to the Mozambican Inter-
Burkina Faso: Two loans totalling $19m from national Ports Services to help fund the $8m
Burkina Faso: The EU has approved a support the Islamic Development Bank; the first for rehabilitation of the Maputo Port Container Ter-
programme for structural adjustment for the $9.5m, repayable over 30 years with a 10-year minal.
1997-98 financial year for a non-repayable grace period, is to help the authorities restore Senegal: A CFA 2.4bn grant from the French
amount of ECU 30.2bn (CFA20bn). Funding dams and develop agricultural land. The second, Development Fund (CFD) to build five fishing
will be implemented as a general import pro- for the same amount but over 25 years, is to help wharves in the north and improve hygiene con-
gramme with disbursement before end-1997 and fund a drinking water supply project for Ouaga- ditions. A CFA 3.64bn grant from Japan to
a second portion in 1998. The dual aim is to dougou. improve equipment and infrastructure at Dakar’s
improve the balance of payments situation, reg- central fish market. The market was built in
ular debt servicing and to provide budgetary aid Egypt: Development aid of Marks 142m
($81.6m) from Germany for professional train- 1989 by means of Japanese funding of
to support state efforts to re-direct public expen- CFA2.5bn.
diture towards priority needs. ing, building or renovating 260 primary schools,
water supply and agriculture. France awarded South Africa: A R10m grant from Denmark
FF 359m ($63m) in aid in 1997 according to to Moumalanga’s department of environmental
Morocco: ECU 58.5m ($64.4m) to promote a financial protocol on projects which include affairs and tourism for staff training.
agriculture and raise the standards of technical irrigation, drinking water, electricity, the Cairo
education and professional training. Two agri- Uganda: Sweden has agreed to Shs12bn grant
cultural projects—the anti-erosion development metro, civil aviation and telecommunications. to the Uganda Multilateral Debt Fund and Swed-
of the Sidi Driss basin and the development of Funding is mainly through concessional loans ish kroner 8m to support local council elections.
from the French treasury complemented by $8m from Norway to support health, education,
the Doukkala plain (centre west), will receive guaranteed bank credits.
ECU 15 and 5.5m respectively. The education Guinea work eradication and decentralization
programme will receive ECU 38m. Gabon: A loan agreement of CFA11bn ($19m) activities, channeled through UNICEF and the
with the Islamic Development Bank for port UN Fund for Population Activities.
South Africa: The EU is to invest Rand 100m refurbishment in Gabon, repayable over 10 years Zimbabwe: $8m from Sweden to support the
into a community project in Free State: 88% of at 7% with a two-year grace period. The funds second phase of the public service reform pro-
the funding will be channelled directly into the will be spent on the Libreville-Owendo and gramme. A further amount of between $15m
project fund support programme and the remain- Port-Gentil ports. and $20m will be released once specific projects
ing 12% will be used for technical assistance Gambia: A Dalasi 87.72m loan agreement with under the programme are identified.
and training. The programme will help disad- the Kuwait Fund for Arab Economic Develop-
vantaged communities and farmers to take up ment to finance the Kombo coastal road project.
viable agricultural activities. Guinea: Kuwait has awarded $10m towards the
cost of building the Garafiri dam, 250km east of ANNUAL
Tunisia: The European Commission has Conakry. The new award brings overall Kuwaiti
released financial aid of ECU 50m ($55m) for contribution to this largest project in Guinea to SUBSCRIPTION
rural development and managing natural
resources. The programme will benefit eight
$30m. An official source said the Garafiri dam,
total cost $198m, should allow Guinea to cover
RATES
provinces in the north and centre of Tunisia and 90% of its energy needs. France, the EIB, and
aims to reduce regional disparities by increasing various Arab countries are also taking part in MONTHLY BULLETINS
the income of disadvantaged rural population, financing this project.
improving their living conditions and protecting Political Series:
Kenya: A grant worth more than Shs135m from UK & Europe £273.00
natural resources, particularly water, all within Austria as additional funding for the Masinga- N. America $487.00
the terms of sustainable development. Kitui water supply project. Two grants totalling Rest of World £308.00
Shs 255m from Japan, the first to support
upgrading laboratories using in HIV and AIDS Economic Series:
UK & Europe £273.00
research, the second to fund polio eradication. N. America $487.00
UN AGENCIES Shs20m memorandum of understanding with Rest of World £308.00
Canada to support good governance as part of
a Shs40m Canadian initiative to promote a Combined Series:
Egypt: The World Bank has approved a $15m UK & Europe £411.00
loan to help poor farmers. democratic culture and encourage accountability
in Kenya. N. America $730.00
Rest of World £462.00
Uganda: The World Bank is to release a $75m Mauritania: The Kuwait Fund has lent $11m
grant from April 1998 for the primary education to fund the construction of an 18km road. Oug- Overseas mailing: Airspeed (N.
uiyas 114m from Germany for anti-poverty America), Airspeeded delivery
programme which will also receive a $75m loan (Elsewhere).
on International Development Association programmes. The Arab Fund for Economic and
(IDA) terms for a 40-year period. Social Development has awarded aid of $38.7m Annual binder: available at £26.00 or $41.00
for electricity production through the Manantali For further information or to place
Zambia: The United Nations Development Pro- dam and for road rehabilitation. The loan is your subscription please contact:
repayable over 25 years with interest of 3%. The Journals Marketing Manager,
gramme (UNDP) signed a $1.4m loan agree- Blackwell Publishers, 108 Cowley
ment to help combat poverty and environmental Food aid of 3,000 tonnes of wheat and flour
Road, Oxford, OX4 1JF, UK.
damage in Lusaka, the UNDP is to provide worth FF1m from France. Tel: + 44 (1) 865 791100
$700,000, the Irish government $668,000 and Morocco: Spain has approved a $4m loan to Fax: + 44 (1) 865 791347
the Zambian government $172,000 in kind. help fund construction of a port at Agadir, inter-

A B C
 Blackwell Publishers Ltd. 1997.
13274 – Africa Research Bulletin Index

INDEX
African Currency Table ......................... 13256A Gabon SADC
African Development Bank Foreign aid ........................................... 13273B Summit on trade and investment ........ 13246C
New loans ............................................. 13255C Gambia Senegal
Algeria Economic aid ........................................ 13273B Transfers of funds from Guinea .......... 13249B
Trade agreement with Ethiopia ........... 13248C Ghana Co-operation with Morocco ................. 13249C
Airlines ................................................. 13260A Relations with Burkina Faso ............... 13248C Ports ...................................................... 13263B
Interest rates cut ................................... 13260C Company brief ...................................... 13271B
Company brief ...................................... 13271A Guinea Economic aid ........................................ 13273C
Transfers of funds from Senegal ......... 13249B
Angola ADF loan .............................................. 13256B Somalia
Danish sanctions against UNITA ........ 13248C Bauxite .................................................. 13266C Floods ................................................... 13252A
Huge potential ...................................... 13249A Foreign aid ........................................... 13273B
Key indicators ...................................... 13249B South Africa
Railways ............................................... 13263C Kenya Chinese in deals worth $540m ............ 13248A
Agricultural loan .................................. 13265C Visas for Britons .................................. 13249B UK pledge ............................................ 13248B
Diamonds .............................................. 13269B Floods ................................................... 13252A Poverty relief programme .................... 13253B
Finance Bank liquidation ..................... 13257B Banking ups and downs ....................... 13258B
Benin World Bank questions aid ................... 13257C
Agreements with China ....................... 13248C Wealth tax mooted ............................... 13258C
Airlines ................................................. 13260C Ports ...................................................... 13263B
CGTB strike ......................................... 13254A Foreign aid ........................................... 13273B
ADB loan ............................................. 13255C Sugar ..................................................... 13265B
Liberia Coal ....................................................... 13267A
Botswana Very bright future ................................ 13252B Gold ...................................................... 13268A
Six-year plan ........................................ 13250B Ports ...................................................... 13263A Diamonds .............................................. 13269C
Burkina Faso Minerals ................................................ 13266A Industries .............................................. 13270A
Relations with Ghana ........................... 13248C Libya Company brief ...................................... 13271B
Budget figures ...................................... 13255C Loan to Niger ....................................... 13249B Foreign aid ......................................... 13273AC
Economic aid ...................................... 13273AB Oil ......................................................... 13269A Stock Markets
Burundi Madagascar Lessons to be learned .......................... 13259A
Financial crisis ..................................... 13257A ADF loan .............................................. 13256B West Africa .......................................... 13259B
Cameroon
Privatisations ........................................ 13251B Mali Sudan
Embezzlement charge .......................... 13254A Exports up ............................................ 13247C Khartoum hits back .............................. 13248B
Commercial bank opens ...................... 13257A President’s visit to US ......................... 13247C Sugar ..................................................... 13265C
Budget (1998) ....................................... 13254B
Central African Republic ADF loan .............................................. 13256C Swaziland
Coffee ................................................... 13266A Bank restructuring ................................ 13259C
Market Review ........................................ 13263A
COMESA Tanzania
Council of ministers’ meeting ............. 13245A Mauritania
Budget (1998) ....................................... 13254C IMF satisfaction ................................... 13254B
Congo-Brazzaville Economic aid ........................................ 13273B Food prices up ...................................... 13266A
Appeal for emergency aid ................... 13254A Coffee ................................................... 13266A
World Bank – payment default ........... 13257A Mauritius Company brief ...................................... 13272A
ADF loan .............................................. 13256C
Cote d’Ivoire Telecommunications ................................. 13262
Pineapples ............................................. 13266A Morocco
Industries .............................................. 13270A Trade up with rest of Africa ............... 13248A Togo
Democratic Republic of Congo Co-operation with Senegal .................. 13249C On the way up ...................................... 13253B
Debt talks ............................................. 13250C ADF loan .............................................. 13256C Infrastructure ........................................... 13261
Monetary reform .................................. 13251A 16% have bank account ....................... 13258A Cotton ................................................... 13265A
Ports ...................................................... 13262C Olives .................................................... 13266A Phosphates ............................................ 13261C
Diamonds .............................................. 13269B Company brief ...................................... 13271A
Economic aid ...................................... 13273AB Tunisia
East African Co-operation ADF loan .............................................. 13256C
“The way forward” .............................. 13245B Mozambique Oil ......................................................... 13269B
Census figures ...................................... 13254B Company brief ...................................... 13272B
Egypt Budget (1998) ....................................... 13255A
Action plan ........................................... 13247B EU aid ................................................... 13273A
Cashews ................................................ 13265C
Tourism devastated by massacre ......... 13251B Aluminium ............................................ 13270C UEMOA
Easy access ........................................... 13257B Steel ...................................................... 13272C Customs union postponed .................... 13247A
Airlines ................................................. 13260B Aid ........................................................ 13273C
Oil ......................................................... 13268C Uganda
Foreign aid ......................................... 13273AB Namibia Floods ................................................... 13252B
Diamonds .............................................. 13269B IMF loan approval ............................... 13259C
Equatorial Guinea Power .................................................... 13272B
New air links ........................................ 13262B Malaysian bank purchase ..................... 13260A
Niger Oil ......................................................... 13269C
Eritrea Loan from Libya .................................. 13249B Aid agreements ................................... 13273AC
Trade with Ethiopia ............................. 13249A Spending cuts ....................................... 13253A
ADF loan .............................................. 13256A ADF loan .............................................. 13256C Zambia
Ethiopia Exports to India .................................... 13249C
Trade agreement with Algeria ............. 13248C Nigeria Copper .................................................. 13267A
Trade with Eritrea ................................ 13249A Naira appreciates .................................. 13258A UNDP loan ........................................... 13273A
Ireland to increase aid ......................... 13249B Oil ......................................................... 13268C
Zimbabwe
Growing economy ................................ 13254B Rubber .................................................... 13265B Land acquisition ................................... 13243A
Gold ...................................................... 13267C Rwanda Measures to cushion dollar .................. 13244B
Francophone Movement Hospital privatised ............................... 13254B New air links ........................................ 13262C
Hanoi summit ....................................... 13246A 1998 budget approved .......................... 13255C Company brief ...................................... 13272B
Development and support .................... 13246B ADF loan .............................................. 13256C Foreign aid ........................................... 13273C
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