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MEMORANDUM N° 134/2014 | 07/07/2014

The EBCAM’s Memoranda are issued with the sole purpose to provide daily basic business and economic information on Africa, to the 4,000 European Companies affiliated with our Members, as well as their business parties in Africa.

Should a reader require a copy of the Memoranda, please address the request to the respective National Member. See list of National Members at www.ebcam.org.

2013 – 40 Years devoted to reinforce Europe – Africa Business and Development

SUMMARY

Weekend raid on two Kenyan coastal areas leaves 29 dead Page 2

Kenya on a knife edge as ‘Saba Saba Day’ dawns Page 3

Angolan bio Energy Company produces electricity on an experimental basis Page 4

South Sudan ‘on brink of famine’ Page 5

Norway’s Statoil reduces stakes in Angolan oil blocks Page 5

Africa and the New European Parliament Page 6

Angolan government plans to replace diesel with natural gas at some power plants Page 6

President Barroso announces replacements of 4 Commissioners Page 7

Mozambican tuna company Ematum due to start fishing this year Page 7

EU officials visit South African citrus growers Page 8

Angola’s flagship airline invests to meet demand in Portugal Page 8

Trekking with Ethiopia’s Nomads, from Watering Holes to Pasture Lands, For a Better Life Page 9

Coastal shipping returns to Mozambique Page 9

Sasol weighs Mozambique gas project Page 10

Mozambique considers transforming natural gas into liquid fuel Page 10

Pick n Pay’s Zimbabwe unit to open more stores Page 10

First phase of modernisation of Cahora Bassa substation concluded in August Page 11

SADC special force to undergo training Page 12

European Business Council for Africa and the Mediterranean The European Private Sector Organisation for Africa’s Development 2

WEEKEND RAID ON TWO KENYAN COASTAL AREAS LEAVES 29 DEAD Gunmen killed at least 29 people in raids on two separate areas on the Kenyan coast, the interior ministry said on Sunday. The Somali Islamist militant group al-Shabaab, which attacked the Westgate shopping mall in Nairobi last September, said it had staged an attack on Saturday evening in the coastal area. Nine people lost their lives at the Hindi trading centre in Lamu county, near the scene of attacks in which 65 people were killed last month, Mwenda Njoka, the ministry’s spokesman, said. Another 20 people were killed in another attack in the Gamba area of neighbouring Tana River county. Both counties are situated north of the port of Mombasa. "There were two attacks in Lamu and Tana River last night," Ms Njoka said. "In Lamu we have nine people dead and in Tana River we have 20. The number could rise.” Officials said a group of 10-15 men struck at about 10pm on Saturday at Hindi, situated 15km from the town of Lamu, and close to the town of Mpeketoni, which was nearly destroyed in one of the attacks last month. "They went around shooting at people and villages indiscriminately," said Abdallah Shahasi, the area chief. Al-Shabaab said it had broken into the police station at Gamba and freed suspects from the detention cells. A Kenyan police source corroborated that account. "They killed some of our colleagues and freed Muslim detainees," said the police source who asked not to be named. "Some of those freed were linked to the Mpeketoni attacks two weeks ago. "We still don’t know how many detainees were freed until we verify with registers at the station." Miiri Njenga, the Lamu county commissioner, said the attackers targeted government offices and some properties were burnt down. The Kenyan Red Cross said three people had been taken to hospital with injuries, from both areas, adding that another one had been reported missing in Gamba. The wave of gun and grenade attacks along the coast and in Nairobi has hurt tourism, a leading source of foreign exchange. Meanwhile Kenya’s main opposition party is gearing up for a mass rally on Monday in a major challenge to the country’s year-old government amid mounting security woes and fears of renewed ethnic violence. Opposition leader and former Prime Minister Raila Odinga plans an anti-government rally in central Nairobi on Monday, the anniversary of protests for multi-party democracy in the 1990s. Attacks last month on the coastal Mpeketoni district left at least 60 dead and were claimed by Somalia’s Al-Qaeda-linked al-Shabaab insurgents, but President Uhuru Kenyatta blamed "well-planned, orchestrated and politically motivated ethnic violence" carried out by "local political networks". The reaction served to highlight the intensity of the rivalry between Mr Kenyatta and his longtime rival Mr Odinga, who failed in a bid for the presidency last year. Mr Odinga says he is organising the rallies to address major government failures, including worsening crime and insecurity, rising living costs, impunity, corruption and allegations of ethnic favouritism in government appointments. "Kenya is a nation apparently at war with itself... inter-ethnic relations between our diversity of communities have deteriorated to their lowest point in our history," Mr Odinga’s CORD party said in a statement ahead of the rally. Police say they will deploy 15,000 officers to ensure the rally passes off peacefully, with the country already on high alert fearing attacks by al-Shabaab gunmen, who have vowed revenge for Kenya’s military presence in Somalia. Attacks have badly damaged Kenya’s key tourist industry, adding to the woes of the economy. Foreign embassies have urged citizens to stay away from the demonstration. A series of smaller rallies have recently been held across the country, all passing off peacefully. Mr Kenyatta’s government has dismissed Mr Odinga’s accusations, and has warned him not to overstep the mark. "If it is an honest discussion between Kenyan leaders, they know they can get one from us," Vice-President William Ruto told Kenyan media. "What we don’t want is discussions about mass action, that ‘we are going to make the country ungovernable if you don’t do what we are saying’. Spare Kenyans that kind of discussion." Some Kenyans are returning to home areas fearing violence, despite assurances from police that the day will pass calmly. Bitter memories are still fresh from 2007, when elections escalated into ethnic 3 conflict in which more than 1,200 people were killed, violence for which Mr Kenyatta and his deputy Mr Ruto face crimes against humanity charges at the International Criminal Court. The 2007-8 violence erupted when Mr Odinga accused then president Mwai Kibaki of rigging his way to re-election, but what began as political riots quickly turned into ethnic killings of Kibaki’s Kikuyu tribe, the country’s largest single group. In turn, they launched reprisal attacks, plunging Kenya into its worst wave of violence since independence in 1963. In Naivasha, situated just 80km northwest of Nairobi and a key agricultural area packed with farms growing flowers for export, some were leaving on buses. "We are leaving this town, as we fear that chaos could break out and the 2008 violence was an example to us, " said Judy Odour, as mother of two, waiting to board a bus from Naivasha, one of the worst affected areas during the 2007-08 violence. "We fear that many people may be killed," said taxi driver Peter Otieno, in the western port of Kisumu. The rally, due to held in Nairobi’s Uhuru park, kicks off at noon. (Reuters, with AFP 07-07-2014)

KENYA ON A KNIFE EDGE AS ‘SABA SABA DAY’ DAWNS On March 19, former Kenyan Prime Minister Raila Odinga posted two unusual statements on his Facebook page: "A storm is coming", and then, a little while later, "I will give more details very soon". These posts from a page of which the previous updates had been pictures of and the latest on the politician’s engagements stirred a lot of excitement, as noted in the comments, which continue to stream in to date. The page has not been updated since. On May 31, Odinga flew back to Kenya from a sabbatical in Boston and was greeted by a big "welcome home" rally, accompanied by a message that went under the hashtag #BabaWhileYouWereAway. The hashtag served as an update from the people to one of their political leaders on what had happened in the country while he was away. When "Baba" took to the podium to address the thousands gathered, amid chants of "Ouru must go" (a reference to Kenya’s president and Odinga’s main political rival, Uhuru Kenyatta), he made a demand for a national dialogue with the incumbent "Jubilee" government to address insecurity and corruption in the country. He pegged this demand on a 60-day deadline that would expire today, "Saba Saba Day". Saba is Swahili for the number seven (hence 7/7 Day). The deadline created a sense of some unclear event that would follow if the opposition’s demands were not met. Odinga even went on to declare Saba Saba a public holiday two weeks after the rally, saying that the day would mark a big change for the country. Saba Saba is a day of historical significance in Kenya’s politics. In 1990, it was the time of prodemocracy protests against the authoritarian government of Daniel arap Moi, which had cracked down on freedoms, including the right of assembly. As Saba arrives, Kenya is in a heightened political mood. The rhetoric has seemingly stoked tensions that, as per the country’s political history, often follow ethnic lines. Odinga and other members of his opposition Coalition for Reforms and Democracy have been holding rallies around the country that were reminiscent of electioneering periods. They demand dialogue with the government "or else a rally on Saba Saba Day", which has been interpreted as a call from the opposition to form a coalition government similar to that which was established after the 2007-08 postelection violence. There have also been hate leaflets found circulating in some parts of the country, threatening the eviction of members of certain ethnic communities. Amid all of this, an attack in the coastal town of Mpeketoni further compounded things and opened other avenues of speculation. The al-Shabaab terrorist group initially claimed responsibility for the attack, but the government downplayed this and instead claimed that it was politically motivated ethnic violence. Mpeketoni is a town in which the founding president, Jomo Kenyatta, resettled members of the Kikuyu ethnic group. The claim that the attack was some form of ethnic cleansing comes from the fact that most of those who were killed were Kikuyu, the community from which Uhuru Kenyatta hails. This has led to some MPs aligned with the president’s Jubilee Coalition to call upon Kikuyus to rise up and defend Kenyatta’s presidency. 4

The cabinet secretary in charge of the ministry of the interior recently said that the government was aware of the opposition recruiting militia groups to destabilise the government. While it has been asked why the government has not then arrested anyone it knows to be doing so, this and other statements remain largely unexplained, and it has been up to Kenyans to make sense of them. Reactions to all these events online indicate a resurgence of hateful and inflammatory speech, pitting ethnic groups against each other. Indeed, some of the reactions to Odinga’s unexplained Facebook posts have indicated that many Kenyans understood the messages as a call to violent action. It is particularly interesting to note that the two posts (on an oncoming storm and promise of more details) were not posted on his other active social media channel, Twitter, nor has he explained them, in the mainstream media or elsewhere. This makes it important to ask if this rhetoric is dangerous. Dangerous speech, as defined by Susan Benesch, director of the Dangerous Speech Project, is "speech with a high potential to catalyse or inspire mass violence". To assess the dangerousness of speech, Benesch offers the following variables in her Dangerous Speech Framework: a speaker’s influence, the audience’s receptiveness (to incitement by the speaker), the content of the speech (that may be taken by the audience as inflammatory and understood as a call to violence), the social and historical context of the speech, and the medium of dissemination, including the language in which it was expressed. Weighing these variables against the utterances of influential politicians in the Kenyan government and the opposition, we have before us clear-cut instances of speech with a potential to catalyse mass violence. Even though most of these have not been explicit calls to violent action, how they have been received by different audiences against the backdrop of what befell the country after the 2007 election is very telling. During the election campaign of seven years ago, politicians, media personalities and even musicians used covert rhetoric. Statements such as "let’s uproot the weeds from our crops" and "we don’t want the stains among us" were the catalyst to violence on an unprecedented scale in the country. More than 600,000 people were displaced, and more than 1,000 others were killed. The opposition’s call for a national dialogue to address serious issues plaguing the country is something that is, in fact, welcomed by many. However, how the call is being made, and some of the clearly reckless statements accompanying it, have plunged the country into tension. Those leaders, even among the opposition ranks, are urging Odinga to call off the Saba Saba rally could indicate that the country’s conscience has been reawakened by the fear that, if ignited, the violence might be uncontrollable. Several politicians have been summoned by the police to give statements after claims they have engaged in hate speech. In one instance, a political strategist affiliated with the government had his Facebook page blocked for use of speech that was, in Kenyan law, seen as intended to stir ethnic hatred. Kenyans, it appears, are also learning something from this experience. As a Swahili saying goes, "When two bulls fight, it is the grass that gets destroyed". Efforts to defuse the tension resulting from the heated political rhetoric are visible, especially online. We hope that this offers a window of insight into some conversations taking place offline as well. After all, the most effective way to deal with dangerous speech is to have more rational speech. This rhetoric would have many think that Kenyatta and Odinga have drawn lines in the sand and the rest of us have to pick sides. A photo of them laughing with each other at an event the other day speaks volumes about the above saying. The grass, however, is learning that it can raise its voice, and refuse to become collateral damage. Dialogue is a word whose interpretation in Kenya is currently unfolding. We shall see today, on Saba Saba Day. (BD 07-07-2014)

ANGOLAN BIO ENERGY COMPANY PRODUCES ELECTRICITY ON AN EXPERIMENTAL BASIS Angolan bioenergy company Companhia de Bioenergia de Angola (Biocom) since 30 June has been producing electricity on an experimental basis, the company’s director for sustainability, personnel and company organisation, Fernando Koch said Friday. 5

Cited by Angolan news agency Angop, Koch also said that final details were being dealt with so that by September the power production project would be inaugurated and supply electricity to Cacuso municipality and the city of Malanje. He also said that in September the company would start producing 18,000 tons of sugar and 3 million litres of ethanol per year. The company estimates that as of 2019 it will produce 256,000 tons of sugar and 30 million litres of ethanol, as well as electricity for the Capanda/Cacusa high voltage line, which supplies the municipality and city of Malanje. Biocom, which is part of the Capanda Agro-Industrial Hub, is a partnership of the Angolan State, via the National Private Investment Agency (ANIP) and Sonangol Holding, with a 20 percent stake and Angolan groups Damer and Brazil’s Odebrecht, with 40 percent each. The chairman of the industrial hub management company Sociedade de Desenvolvimento do Pólo Agro- industrial de Capanda (Sodepac), Carlos Fernandes, said last year that total investment was estimated at US$250 million and the project would create 500 direct jobs and 700 indirect jobs. (07-07-2014)

SOUTH SUDAN ‘ON BRINK OF FAMINE’ Famine could break out in war-torn South Sudan within weeks unless there was massive funding for food aid, relief agencies warned on Thursday. "If the conflict in South Sudan continues, and more aid cannot be delivered, then by August it is likely that some areas of South Sudan will slip into famine," warned Britain’s Disasters Emergency Committee (DEC), a coalition of 13 major aid agencies. Thousands have been killed in the conflict in South Sudan, while more than 1.5-million have been forced to flee since the war broke out in mid-December. Peace talks are currently stalled. The United Nations (UN) has about 40% of the cash it needs, with a shortfall of more than $1bn, with almost 4-million people in need of aid. "There is a very real risk of famine in some areas," DEC chief Saleh Saeed said, warning that "millions of people are facing an extreme food crisis". Famine implies that at least 20% of households face extreme food shortages, there is acute malnutrition in more than 30% of people, and two deaths per 10,000 people every day, according to the UN’s definition. Rains this year are hoped to be around average or slightly below, according to UN experts, with hunger being caused by fighting not extreme climatic conditions. Ferocious fighting between forces of President Salva Kiir and troops loyal to rebel chief Riek Machar has been marked by widespread atrocities. Mr Kiir and Mr Machar committed themselves last month to a third ceasefire deal, and agreed to forge a transitional government within 60 days, but fighting continues in the world’s youngest country. (AFP 04- 07-2014)

NORWAY’S STATOIL REDUCES STAKES IN ANGOLAN OIL BLOCKS

Norwegian Oil Company Statoil plans to reduce the stakes it owns in two offshore oil blocks in Angola, in order to fund an “extensive drilling campaign” in the Kwanza River basin, also in Angola, said a senior company official. Gareth Burns, vice president for business strategy and development said last week that the sales were part of a continuing process of adjustment of Statoil’s portfolio, “in order to maximize the value of the assets.” With this in mind Statoil is selling 10 percent of the stakes it owns in Angolan blocks 38 and 39 to Colombian oil company Ecopetrol. After these deals go through, for a so far unnamed amount, Statoil has said it will continue as operator of both blocks, which are located in deep waters off the southern coast of Angola. 6

The transactions are subject to approval by Angolan state oil company Sonangol, the national concessionaire, as well as the Angolan Oil Ministry. With these changes, block 39 will be 37.5 percent owned by Statoil, its operator, by Total (7.5 percent), WRG (15 percent), Ecopetrol (10 percent) and Sonangol (30 percent) and block 38 will continue to have Statoil as its operator (45 percent) and be 15 percent owned by WRG, 10 percent by Ecopetrol and 30 percent by Sonangol. In Angola, where it extracted around 200,000 barrels of oil per day in 2013, Statoil also has stakes in blocks 22, 25 and 40, in the Kwanza River basin. (07-07-2014)

AFRICA AND THE NEW EUROPEAN PARLIAMENT The European Parliament met yesterday [3rd June] to discuss the implications of the elections and begin selecting new leaders for the parliament. African countries, like the rest of the world, will be closely watching the repercussions of the latest EU "earthquake" (in the words of French President Francois Hollande) on their economies and citizens. These election results are once again the consequence of the 2008 financial crisis, only now--six years later--the crisis' impact has moved beyond the initial effects on the financial sector and global trade to the socio-economic and political fabric of societies across the globe. On May 25, 2014, Europe experienced an unprecedented political pivot to the far right, as European Union countries elected their leaders for the next five years. Seven countries of the EU (what I will call the EU7) voted to send far-right parties to Brussels. In France, these parties received 25 percent of the national vote; Denmark, 23 percent; the U.K., 20 percent; Austria, 20 percent; Hungary, 15 percent; Finland, 13 percent; and Greece, 12 percent.[1]Thus, the far right collectively will hold over 30 percent of the seats in the new EU parliament. Lack of growth in Europe has dimmed the enthusiasm of integration and openness that formed the hallmark of the EU. The economics of the EU have changed: It started with 15 countries at the end of 2003 and growth rates of 3.9 percent on average, to 28 countries and an average growth rate of -0.4 percent in 2012. Of the seven countries that voted to shift to the far right, growth has plummeted from 4.2 percent in 2000 to -1.2 percent in 2012. Unemployment rose from 7.3 percent in 2000 to 10.3 percent in 2012 in these countries over the same period. Worse still, many of these countries have gone through five years of no growth. As a consequence, a sense of economic despair is growing among the middle and lower classes. This difficult economic situation will be the backdrop of the meetings on Tuesday. (AllAfrica 03-07-2014)

ANGOLAN GOVERNMENT PLANS TO REPLACE DIESEL WITH NATURAL GAS AT SOME POWER PLANTS

The Angolan government has a programme underway to replace diesel-fired power plants with gas-fired plants in order to reduce the cost of power production, said the Minister for Energy and Water, João Baptista Borges. During an energy conference held Thursday in Luanda the minister said that “the average cost of producing electricity is estimated at US$220 per megawatt hour, which is significantly higher than in the rest of the region and another factor affecting sustainability of the electricity sector.” “We don’t plan to scrap diesel altogether, as we will need those plants to cover short terms needs, such as peak periods, but rather we plan for them to stop operating on a continual basis and, in some cases, also replace the fuel they use with natural gas,” added Borges. According to the minister, the first units adapted to using natural gas, such as the thermal plants in Cazenga (Luanda) – the most important plant in the country – and Malembo (Cabinda), are expected to be operational “soon”. An investment of around US$1 billion was confirmed during the conference for electrification of the central and southern regions of Angola. The project will be carried out by an Israeli company and will increase the country’s electrification rate, which currently stands at around 33 percent. (07-07-2014) 7

PRESIDENT BARROSO ANNOUNCES REPLACEMENTS OF 4 COMMISSIONERS Following the recent European elections, 4 Commissioners have resigned in order to take up theirs seats in the European Parliament as from today 1 July 2014:

- Vice President Reding, responsible for justice, fundamental rights and citizenship - Vice President Tajani, responsible for industry and entrepreneurship - Vice President Rehn, responsible for economic and monetary affairs and the Euro - Commissioner Lewandowski, responsible for financial programming and the budget President Barroso has decided to reallocate the portfolios as follows, pending decisions on their replacements (on the basis of article 246 TFEU):

- Vice President Kallas will take responsibility for the portfolio of Vice President Rehn, responsible for economic and monetary affairs and the Euro - Commissioner Hahn will take responsibility for the portfolio of Vice President Reding, responsible for justice, fundamental rights and citizenship 1 - Commissioner Barnier will take responsibility for the portfolio of Vice President Tajani, responsible for industry and entrepreneurship - Commissioner Piebalgs will take responsibility for the portfolio of Commissioner Lewandowski, responsible for financial programming and the budget

4 out of the 7 Commissioners who successfully ran for the European elections have resigned from the to take up their seats in the European Parliament as from today 1 July 2014.

The procedural rules that have to be followed in case of a replacement of a Commissioner after he/she resigns are laid down in article 246 of the TFEU:

- the President of the Commission informs the Council and the European Parliament of the resignations; - the Member-State concerned (i.e. nationality of the Commissioner that resigned) then decides on a proposal for a candidate for replacement in a letter addressed to the Council and to the President of the Commission. - the Council formally consults the European Parliament on the candidate; - the President of the Commission informs the European Parliament of the portfolio he intends to attribute to the candidate; - the European Parliament gives its opinion on the candidate 2; - the Council proceeds, by common accord with the President of the Commission, to the appointment of the candidate; - the Commissioner takes office immediately, upon appointment.

The four Member States concerned have now all nominated candidates for the replacement, namely Finland – Mr ; Poland – Mr ; Italy – Mr and Luxembourg – Ms . President Barroso has announced that he will allocate the economic and monetary affairs and the euro portfolio to Jyrki Katainen, on whom the Council has formally already consulted the European Parliament. The further portfolio allocation decisions will be considered by the President, as soon as the Council has formally consulted the European Parliament on the other nominations.

President Barroso also decided to appoint and Günther Oettinger as Vice-Presidents for the remainder of the mandate. (EC)

MOZAMBICAN TUNA COMPANY EMATUM DUE TO START FISHING THIS YEAR Mozambican tuna fishing company Empresa Moçambicana de Atum (Ematum) is expected to start fishing before the end of this year following the arrival in Mozambique, due in September, of the first five fishing vessels ordered in France, said Mozambique’s Fishing Minister, Victor Borges. 8

The minister also said that the company, which is 67 percent-owned by the Mozambican state and 33 percent owned by private investors, would only be fully operational in 2015 with the expected arrival of another 16 fishing vessels, according to Mozambican daily newspaper Notícias. Borges who was speaking recently in Maputo gave no details about the company’s operations, explaining that this was sensitive business information and that publicising it could affect the company’s competitiveness. He did say, however, that in total the first five fishing vessels were expected to catch 1,500 tons of tuna per year. Ematum’s creation caused some controversy as some donor countries questioned the counter- guarantee given by the Mozambican state for a loan of US$850 million to order the fishing vessels from a shipyard in northern France. The counter-guarantee caught the so-called Group of 19 by surprise as it was never mentioned by the Mozambican government, was so large and was a flagrant violation of the State Budget for 2013. Tuna fishing in Mozambique is currently carried out by over 100 fishing vessels, almost all of which are foreign, notably from Japan and Europe, and there is just one Mozambican tuna boat. As part of efforts to ensure that tuna fishing is carried out mainly by Mozambican operators, the Fishing Minister said that negotiations were underway with Japan to register some fishing boats in Mozambique. (07-07-2014)

EU OFFICIALS VISIT SOUTH AFRICAN CITRUS GROWERS A delegation of European offcials visited South Africa last week to see for themselves the measures put in place to meet regulations on CBS. Among the delegates present were EU Ambassador (who is from the Netherlands), the Spanish Ambassador and the Dutch Agricultural Counsellor, EU delegate (Riaan De Lange), Spanish Economic Counsellor (Emilio Calvo) and Italian Commercial Attaché (Gerardo De Maio), they were invited by Department Agriculture, Fisheries and Forestry (DAFF), Directorate International Relations and Cooperation (DIRCO) and CGA to visit Rosle' Farm in Groblersdal. the delegation were exposed to the myriad of requirements, certifications and audits necessary to remain a world class exporter. After seeing all the documentation and administration required meeting export requirements the group inspected the chemical stores and observed a spray machine in the orchards. While in the orchards the group saw firsthand how fruit is selected for the ethephon testing; in addition to seeing pickers going about their business. The Packhouse was the highlight for the visitors – with packing in full swing the advanced technology could be observed in action, while the job opportunities presented by an export Packhouse was very evident. The PPECB inspector was on hand to explain his role in phytosanitary and quality assurance. The group also observed the next steps in the testing of fruit from the orchard – dipping of fruit into ethephon and two week storage. (Fresh plaza)

ANGOLA’S FLAGSHIP AIRLINE INVESTS TO MEET DEMAND IN PORTUGAL

Angolan flagship airline Linhas Aéreas de Angola (Taag) plans to open a store in the centre of the city of Porto, northern Portugal to meet increased demand for its services in that part of the country, the company announced. The new store is due to open to the public in September and requires investment – including acquisition, building work, furniture and equipment – of around 2 million euros. Taag offers seven flights a week from Luanda to Lisbon and two flights per week from Luanda to Porto, a route it offers exclusively, with three Boeing 777-300 ER aircraft, the third of which was delivered in Luanda last week. Taag’s Portuguese counterpart, TAP – Air Portugal, offers 10 flights per week between Luanda and Lisbon on Airbus aircraft. (04-07-2014)

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TREKKING WITH ETHIOPIA’S NOMADS, FROM WATERING HOLES TO PASTURE LANDS, FOR A BETTER LIFE When he was a young boy, 20-year-old Abdi, who comes from a small pastoralist community in Ethiopia’s Somali Region, “knew about school, reading and writing but did not expect this is something we would ever get close to.” Abdi couldn’t attend school because he comes from a nomadic people, who are constantly moving from place to place. His small pastoralist community has temporarily set up camp here, outside the town of Shilabo close to the Ethiopian-Somali border. It lies 425 kilometres away from the bustling activity of Jijga, the capital of Ethiopia’s Somali Region. As the sun rises over the arid landscape, women in brightly-coloured traditional clothes light up the small villages, men in Somali sarongs pull lines of camels up the road, and the smell of stoves being heated for early breakfast blows through the hot air. A few years before, the journey to get here would have been a bumpy and dusty one and would have taken days but the new road makes it easier to reach this once cut-off destination. This will be complimented soon by the opening of the Kebri Dahar international airport, built by the regional government.

An elder leads us through the community’s settlement. Each family has a few small domes constructed with twigs and cloth secured with small fences made out of bush branches. It is a world away from the fast-developing cities of Somali Region, where investment is being channeled into shopping centres, hotels, large abattoirs and new housing. On the edge of the settlement, one of the structures is seemingly packed full of people. Inside, children crouch on the floor, clutching notepads and pencils. Standing over them is their teacher, Fassah, a wiry man who points to Somali letters on the blackboard. “Without these classes the community would find it difficult to learn how to read and write. It opens doors for them,” Fassah tells IPS during break time. He is one of the many teachers working with pastoralist communities across the region who travels whenever and wherever the pastoralists go. It’s only now as a 20-year-old after he’s learned his letters, that Abdi can even entertain the thought of furthering his education. “Now we can even go to Jijiga university,” he tells IPS as he stands outside the structure that serves as a school. “Our parents never dreamed of such education, now we can learn so much and help our community,” Abdi says. (IPS 30-06-2014)

COASTAL SHIPPING RETURNS TO MOZAMBIQUE Coastal shipping is once again linking the coast of Mozambique, which is 2,400 kilometres long, after many years of complete inactivity due to the local economic climate, according to Mozambican daily newspaper Notícias. The newspaper said that ships loaded with locally- or foreign-produced goods were putting in at the country’s main ports of Maputo, Beira, Quelimane, Nacala and Pemba. With government support the shipping is carried out by an operator called Restore, which in its first year of business (in 2013) carried around 800 containers, 350 of which were empty, at the port of Beira alone. The chief executive of Cornelder de Moçambique, the company that manages the port of Beira, said that coastal shipping is more profitable compared to transporting goods by road and goods reach consumers at much cheaper prices. Carlos Mesquita also said that in this short space of time it is clear that there is a greater variety of goods on offer in the main urban areas along the coast although prices continue to rise when travelling into the interior of the country. (04-07-2014) 10

SASOL WEIGHS MOZAMBIQUE GAS PROJECT Sasol is the second company in little more than a week to agree with Mozambican authorities to undertake a study into building a gas-to-liquid (GTL) fuel project in the country. Sasol told the market on Thursday that it would undertake a joint pre-feasibility study into the plant with Mozambique’s state-owned oil company Empresa Nacional de Hidrocarbonetos (ENH) and Italian multinational Eni. The duration of the study, which precedes a bankable feasibility study if the economics stack up, is unknown, as is the size of the plant, which will primarily produce diesel. The size, location, cost and timing of the plant would all be determined during the course of the study, said Sasol spokesman Alex Anderson. He added that the study would investigate both Mozambican demand and that of South Africa. It would also look at other countries in the region and potential export markets for the finished product. The plant will use gas extracted from the Rovuma offshore gas field. Sasol is looking at building a $16bn-$18bn GTL plant in the US capable of producing 96,000 barrels of fuel a day. Estimates by Eni and America’s Anadarko Petroleum Corporation put the size of Rovuma at 100-trillion cubic feet of gas off the northern coast of the country. The Mozambican government has drawn up a gas master plan to ensure it benefits from its resources. The option of liquefying the gas for sale to export markets is among the proposals being considered. "GTL plants tend to be large-scale, although Sasol indicates smaller plants could be profitably operated in Mozambique," said a 2012 draft executive summary of the master plan. "GTLs production in Mozambique could displace imports and open up regional African markets for transportation fuel." Sasol CEO David Constable said the proposed plant would benefit the region. "The proposed GTL facility firmly aligns with Mozambique’s gas master plan goals, and, if successful, will go some way to accelerate socioeconomic development in the country and the broader region." Sasol is no stranger to Mozambique, having found gas in the Pande and Temane fields off the Inhambane province far south of the Rovuma fields in the early 2000s. These are supplying gas to South Africa via an 865km pipeline. Pande and Temane have an estimated 3-trillion cubic feet of gas and are the only ones in production in the country. Ichumile Gqada, from the South African Institute of International Affairs, said in a paper last August that the gas fields, which are of commercially exploitable size, could generate billions of dollars for Mozambique and make it Africa’s third-largest exporter of liquid natural gas.(BD 04-07-2014)

MOZAMBIQUE CONSIDERS TRANSFORMING NATURAL GAS INTO LIQUID FUEL

Mozambican state oil and gas company Empresa Nacional de Hidrocarbonetos (ENH) has agreed with South Africa’s Sasol and Italy’s ENI to carry out a pre-feasibility study for construction of a factory to transform natural gas into liquid fuel. The study is the immediate result of a memorandum of understanding signed by all three companies and the factory, which will be fed by natural gas extracted in the Rovuma basin is expected to have an initial production capacity of 96,000 barrels of liquid fuel per day. ENH and ENI are partners in the Area 4 block of the Rovuma basin and Sasol is carrying out the Pande and Temane project with ENH and has the technology to transform gas into liquid derivatives. According to Mozambican daily newspaper Notícias the study is the result of efforts by ENH to find a technical partner to build a gas-to-liquids factory with a view to producing liquid fuels that are essential to the Mozambican economy. The chairman of ENH, Nelson Ocuane, was cited in a statement published by the company as saying that, alongside liquid natural gas (LNG) production, which is the anchor project of gas exploration in the Rovuma basin, the company has prioritised finding projects for mass local use of the natural gas. 11

“Establishing a project of this kind will allow the country to produce liquid fuels from natural gas, such as diesel and petroleum, for example, and to reduce its dependence on imports,” said Ocuane. (04-07- 2014)

PICK N PAY’S ZIMBABWE UNIT TO OPEN MORE STORES Pick n Pay’s 41%-owned Zimbabwean retailer TM Supermarkets will open more stores in the next financial year (2015), Meikles Limited group chairman John Moxon said on Wednesday. Meikles owns 59% of TM Supermarkets. The addition of four stores under the Meikles Mega Market stores portfolio will add to TM’s chain of 53 supermarkets, which it runs nationwide, and will narrow the gap behind its main rival, OK Zimbabwe, which has 59 stores. Mr Moxon said the increase of supermarkets from 49 in March last year to 53 had increased trading space 10% to 55,000m². "Their impact on turnover and profitability will be felt in the ensuing financial period. "Post the end of the financial year, five additional new sites have been secured for development in the 2015 and 2016 financial years, with the potential of increasing the trading space by more than 18%," said Mr Moxon. In its latest results, Meikles — a diversified group with interests in retail, hotel, agriculture and mining — posted an aftertax profit of $37m for the year ended March, up from $6.5m the prior year largely due to a leap in nontrading income. Nontrading income for the period rose to $48.8m during the period under review from $9.7m last year. In terms of performance, TM supermarket’s turnover fell to $334m from $336m, while customer count throughout the store footprint increased 8% compared to the prior year. The Meikles Mega Market stores, which began operations last December, contributed just more than $2m in turnover during the period under review. Mr Moxon said progress had been made in restructuring its departmental stores. The number of such stores was reduced to five from 12 last year. As a result, turnover from department stores fell to $12.5m from $18.5m during the same period last year. Meanwhile, Mr Moxon said the group would also expand its mining portfolio and acquire a 51% controlling stake in various gold mines dotted across Matabeleland province at a cost of $3m. The group also expects to recover $89m owed to it by the Reserve Bank of Zimbabwe at the end of this month. "Intense negotiations with the ministry of finance and economic planning are in progress with an intention to facilitate access to these funds by the end of July 2014," Mr Moxon said. "All parties to the discussions believe that this timetable is realistic," he added.

FIRST PHASE OF MODERNISATION OF CAHORA BASSA SUBSTATION CONCLUDED IN AUGUST

The first stage of the programme to repair and modernise the substation of the Cahora Bassa Hydroelectric Dam (HCB), in the town of Songo, in Mozambique’s Tete province, is due to be concluded in August, the chairman of the company, Paulo Muxanga said. The chairman of HCB also told Mozambican daily newspaper Notícias that the modernisation of the substation included replacing all the equipment that is in a poor state of repair. According to Muxanga, by August the equipment will be practically set up along with the new material acquired by the company. After the modernisation the dam’s production is expected to increase. The HCB substation, which is now being repaired and modernised, previously had equipment that was considered to be obsolete as the country’s civil war had prevented it from being replaced. “During the 16 years of the civil war HCB was not fully operational, and showed no signs of disrepair but, as soon as it started operating again, the parts started to show their true state, and it became urgent to replace them,” said Muxanga. 12

HCB’s previous board of directors were aware of the severity of the problem and opted to launch the modernisation programme at the Southern Power Plant and which involved repairing the spillways and automation of the plant. Later on the modernisation of the substation in the town of Songo was launched. (07-07-2014)

SADC SPECIAL FORCE TO UNDERGO TRAINING The Angolan army has presented a schedule for the training of a special force for the Southern African Development Community (SADC) aimed at enhancing security in the region. The force includes soldiers from 9 SADC countries - Angola, Botswana, DR Congo, Mozambique, Namibia, Tanzania, South Africa, Zambia and Zimbabwe.

A statement issued by the UN Mission in DR Congo on Wednesday says that the exercise aims particularly at training a SADC special force ready to intervene in case of need, in a bid to counter the threats to security in the sub-region, meet humanitarian disasters and contribute to the UN peacekeeping force.

The UN Mission in DRC has also presented a report on the implementation of a framework agreement for peace, security and coordination in DR Congo and in the Great Lakes Region.

A statement said Rwanda and Uganda had signed a service agreement for a railway project to link their capitals.

The agreement follows the decision made early this year by Kenya, Rwanda and Uganda to sign a tripartite agreement to speed regional integration. (Pana 03/07/2014)

Fernando Matos Rosa Brussels

European Business Council for Africa and the Mediterranean The European Private Sector Organisation for Africa’s Development Rue Montoyer – 24 – Bte 5 1000 Brussels (Belgium) www.ebcam.org Contact: [email protected]