www.africa-confidential.com 27 October 2000 Vol 41 No 21 AFRICA CONFIDENTIAL I 2 NIGERIA Power and greed Privatisation is keenly favoured by High street havens foreigners and for different reasons The search for Abacha’s stolen money has led to several major by Nigeria’s business class. Western banks and is at last forcing their governments to act President Obasanjo’s sell-off plans are gathering steam but donors Investigators pursuing some US$3 billion of funds stolen by the late General ’s regime complain of delays and worry about between 1993-98 have established that the cash was deposited in more than 30 major banks in state favouritism. Britain, Germany, Switzerland and the United States without any intervention from those countries’ financial regulators. The failure of the regulators to act even after specific banks and NIGERIA II 3 corporate accounts were named in legal proceedings in Britain and congressional hearings in the USA points to a lack of will by Western governments to crack down on corrupt transfers (AC Vol Oduduwa’s children 40 No 23). Quarrels between different departments - with trade and finance officials trying to block any public disclosure of the illicit flows - delayed government action. None of the banks named so President Obasanjo’s efforts to reestablish the nation are at risk far as accepting deposits from Abacha’s family and associates - Australia and New Zealand from violence involving its two Banking Group, Bankers Trust, Barclays, Citigroup, Goldman Sachs, HSBC, Merrill Lynch, biggest ethnic groups, the Yoruba National Westminster Bank and Paribas - have been formally investigated nor had any disciplinary and the Hausa-Fulani. The latest action taken against them. outbreak began in the Middle Belt It was not until this week, more than two years after Abacha’s death, that Britain’s Financial city of Ilorin. Services Authority announced an investigation into how its money laundering controls had failed to block the flow of stolen Nigerian state funds through the City of London. This is several months after LIBYA 5 a formal request for assistance was made by Nigerian government investigators. Similar requests have been made to the German, US and Swiss authorities but so far only the Swiss have responded Gadaffi’s prime time by setting up their own investigation. The bulk of the $3 bn. is reckoned to be in Switzerland, some Rarely has Colonel Gadaffi looked of which has passed through the accounts of the Swiss affiliates of multinational companies. so secure. US politicians accept an end to sanctions is inevitable, Doublethink in the G7 the Islamist insurgency has diminished and oil sales will yield a The Abacha loot saga is particularly embarrassing for Western governments critical of corruption bumper US$11 billion this year. in Africa. The rich countries club, the Group of Seven, meeting in Okinawa, Japan in July, demanded tougher controls on money laundering in states such as the Bahamas, Israel, , Panama, the Philippines and Russia. Other countries and principalities such as Monaco, ANGOLA 6 Luxembourg, Liechtenstein, and Switzerland were singled out for lax controls on money laundering Going straight - and for operating tax havens. Yet almost nothing was said by G7 officials about the use of pukkah Western banks in Europe and North America to launder stolen state funds and drug money. again Last December, President ’s government convinced the Berne authorities to Is President Dos Santos’ investigate accounts set up by Abacha and his allies, and a team of investigators started compiling government serious about dossiers documenting the flow of funds from Nigeria to Switzerland and London. One result is that economic reform at last? Luanda Switzerland’s reputation as a safe haven for stolen funds is collapsing. That’s what Berne had sought officials say yes, pointing to new to avoid by cooperating with what it had hoped would be a controlled inquiry. Switzerland could Finance Minister Julio Bessa and encouraging noises from the IMF. now be a double loser: crooks and despots will no longer trust the legendary discretion of Swiss banks and its financial regulators will be exposed again as encouraging illicit funds. The investigation has led to the Frankfurt, Geneva, London, and New York and offices of several RWANDA/CONGO-K 7 major international banks. The Swiss and Nigerian team’s progress, and detailed revelations in the London daily Financial Times have prompted the British government to take a more high-profile Conditional offers stand on the matter. Although the British Foreign Office and Secret Intelligence Service have The Maputo summit on Congo- discreetly helped the Nigerian-Swiss investigation, we hear that officials in the British Treasury KInshasa failed to win agreement were less keen, insisting they could not act against indivdual account holders unless charges were from the two main rebel groups. laid in Nigeria. And bankers feared more damage to the City of London’s reputation and the loss of lucrative private inflows. Whitehall has now committed to making London-based banks POINTERS 8 cooperate with the probe. Côte d’Ivoire, Germany and the USA have criticised Switzerland, Luxembourg and Liechtenstein for encouraging tax evasion through their private banking facilities and lax controls: now the Abacha saga has Zimbabwe and UK/ rebounded on Berlin and Washington as their banks and companies are linked to the money Africa laundering schemes. 27 October 2000 Africa Confidential Vol 41 No 21

Power and greed

Privatisation is keenly favoured by the international community and based Dangote Industries (with no record in cement making), - for quite different reasons - by Nigeria’s own business people. middle-belters from Benue accused Vice-President Abubakar of President Olusegun Obasanjo’s privatisation plans, although behind promoting Hausa capitalism and the interests of Aliko Dangote, schedule, are gathering momentum as an expensive government the successful company’s owner. roadshow tours Western capitals, wooing foreign investors. With the sale of the local oil marketing companies, most of the Donor officials complain of delays, and worry about state first phase of privatisation is over. The second phase includes favouritism. But a Western banker told us: ‘. . . Obasanjo is trying insurance companies, vehicle assembly plants and newspapers, and to do the right things while the Bank and the Fund have become a real is several months behind schedule, partly because of attempts to problem in Nigeria’. The critics tend to ignore the fact that, after counter allegations of regional favouritism. Several of the firms decades of government interference, the sale of state companies is are already privately managed and should go to buyers with heavily politicised. And now the cut-throat competition among the preemptive rights. business elite is starting to look like a battle. The third phase, due to start next month, includes the biggest and The key figure, attracting equal praise and blame, is Mallam Nasir most discredited of the public entities: the National Electric Power Ahmad el-Rufai, Director General of the Bureau of Public Enterprises Authority (Nepa), Nigerian National Petroleum Corporation (NNPC) (BPE). Rufai, aged 40, is a quantity surveyor whose family runs and Nigerian Telecommunications (Nitel). Rufai has persuaded the successful businesses in Lagos. He worked on public sector reform politicians to give his bureau funds to speed up the sales, and the under Obasanjo’s predecessor, General Abdulsalami Abubakar, World Bank and bilateral donors are offering extra resources. He and was reluctant to stay in government service. He doesn’t blame has managed to fight off most of the economic nationalists who Nigerians for cynicism, but insists the privatisations are open to any railed against foreign investment in telecoms and power, and the public scrutiny. He answers to the National Council on Privatisation, government bigwigs who want to continue appointing directors and headed by Vice-President Atiku Abubakar. Rufai’s problems were awarding contracts to friends. But Rufai must still disprove charges illustrated recently, in the bidding for two large companies. of managerial inexperience. The government offered for sale its controlling stake in a big The toughest job is to establish procedures and workable petroleum products firm, National Oil and Chemical Marketing timetables. A national telecoms policy has been published, but Company (Nolchem), a former affiliate of Royal Dutch Shell. Nigerian there is still no new telecoms law. Rufai has asked a consortium of investors in Petrochem, a local oil marketing company, accused Rufai foreign and Nigerian consultants headed by Booz Allen Hamilton of favouring South Africa’s Engen, whose bid of 25.20 naira per of the United States to propose new laws; he assured last week’s share was far below four rival bids - but, said the critics, would be Nigerian Economic Summit in Abuja that Nitel would be ready for favoured on ‘technical and managerial considerations’. sale next March. Obasanjo’s chief economic advisor, Philip The suggestion was that policy-makers in the National Council on Asiodu, has promised there would be three new cellular phone Privatisation (NCP) had hidden motives for favouring Engen - either operators by the end of this year. that its Malaysian majority shareholders had a record of buying Electric power is further behind; the power policy and a power African assets cheap, using unorthodox negotiating techniques; or bill are to be drawn up together, helped by Britain’s National that the government wanted to increase its oil sales to South Africa. Economic Research Associates. Asiodu said that electric power They complained that they got only one hour each for their face-to- had already been deregulated, with the Lagos state government face negotiations on 20 October, and that the chairman of the United negotiating directly - against the advice of the World Bank - with Bank for Africa, Keem Belo-Osagie, was brought in at the final stage foreign contractors such as Enron, of the US. to help Engen increase its bid. The International Monetary Fund’s man in Nigeria, Reinold van All this seemed worth investigating until, on 23 October, it was Til, warned the Abuja summit that much more needed to be done to announced that the successful bidder was not the allegedly favoured fight corruption and ensure credibility of the privatisation process. Engen nor its rival Petrochem, whose technical partner was Shell. He was particularly worried about inexperienced companies taking The winner was a local marketing company called Conpetrol (in over state enterprises. President Obasanjo, under pressure to speed which India International holds a 30 per cent stake) - on the grounds, up reforms, bristles at criticism of his anti-corruption efforts. He explained Rufai, of its ‘realistic business plan, managerial competence insists that his government is a true believer in the market, and sees and technical capability’. the sale of state assets as the best way to reduce the costs of doing That surprise result won’t end accusations of manipulation and business and boost international competitiveness. Like much graft. When Benue Cement was sold earlier this year to the Kano- coming from Abuja, this remains to be tested.

The probe could lead to a huge repatriation of stolen funds from diligence when accepting deposits from Abacha’s sons Mohammed Switzerland; smaller cash piles stolen by the Mobutu Sese Seko and Abba, and ordered the bank to submit to extraordinary auditing. and Moussa Traoré families were returned to Congo-Kinshasa It criticised five other banks for accepting funds from Nigerians and Mali. The investigators are also unearthing the Abacha family’s linked to Abacha without proper investigation. They included two illicit financial links to some big multinational corporations. The Crédit Suisse affiliates, Bank Hoffman and Bank Leu, plus Crédit federal government in Berne has told nervous Swiss bankers that Agricole Indosuez (Suisse), Union Bancaire Privée, and MM the probe is a one-off, but a precedent has been set for inquiries into Warburg (no relation of UBS Warburg, formerly SG Warburg.) accounts linked to the Philippines, Russia and Kazakhstan. The 19-page report did not go into much detail, and tried to draw After Nigeria’s Geneva attorney, Enrico Monfrini, submitted a a line under the affair. Worried about the damage to Swiss banking, plea in December, the Swiss federal government started a judicial the federal government and the banking commission wanted to put investigation under Judge George Zecchin, and the Swiss Banking the matter behind them. But they underestimated the independent Commission began its quest. The Commission’s report last month minded Judge Zecchin. This month he has made two more visits to censured the giant Crédit Suisse, saying it had not shown due Nigeria, to see Abacha’s son Mohammed, in custody on murder

2 27 October 2000 Africa Confidential Vol 41 No 21 charges. Zecchin wanted Mohammed to identify the different believed to have been the destination for funds accrued by Abacha funds kept by the Abachas: the Swiss are legally obliged to on a foreign exchange scam which may have cost the Central Bank distinguish between the family’s ‘personal’ funds and funds of Nigeria as much as $2 bn. In an operation overseen by National misappropriated through state channels. Mohammed, whose Security Advisor Gwarzo, US dollars were changed on the Nigerian defence is assisted by American lawyer Johnnie Cochran, is said black market for local currency (the average parallel market rate was to have offered cooperation as part of a plea bargain. US$1=Naira80-100 at the time), then changed back to dollars at the Berne is unhappy with Zecchin’s tactics, regarding him as a official rate (US$1=N22) by the Central Bank. Gwarzo appointed maverick who could further damage Switzerland’s business several of his secret agents as currency dealers and allowed them to reputation. Investigating how the Abacha funds arrived in Swiss take their own cuts provided they produced good intelligence about accounts, Zecchin is looking at Swiss-based oil trading firms such who was buying and selling large amounts of dollars. as Glencore and Marc Rich, which also operate in Congo-Kinshasa On the basis of movements out of the Liechtenstein accounts, and Angola. We hear that the accounts of one Swiss-based oil Nigeria secured Luxembourg’s cooperation. Nigerian investigators trader have been frozen. say that accounts in MM Warburg’s Luxembourg branch hold a total The basis of Zecchin’s inquiries is a 43-page plea for legal help of Euros 671 million ($583 mn.). One account is in the name of Raw - a ‘demande d’entraide judiciaire internationale’ listing the banks Materials Development & Trading. and 15 individuals believed to have been involved in the Britain, Germany and the USA are now under pressure to offer the misappropriation of Nigerian state funds; it names Abacha, his investigators the same degree of cooperation given by authorities in wife Mariam, his sons Ibrahim (now deceased), Mohammed and Switzerland, Luxembourg and Liechtenstein. For such governments Abba, his daughter Zainab, and his brother Abdekadir, an important who trumpet their commitment to economic reform and democracy, intermediary with Glencore. it will be a key credibility test.

The launderers and their banks The names listed in the plea include Abacha’s National Security NIGERIA II Advisor Ismail Gwarzo, former Finance Minister Antony Ani, businessman Atiku Bugudu, former Steel Minister Bashir Dalhatu, and the General’s personal friends Ali Abacha, M.G. Zina, Yaya Oduduwa’s children Abubakar and Ahmadu Daura. The listed account holders are Some of the fiercest opposition to President said to have received some of the $3 bn. remitted from Nigeria Obasanjo comes from his western region between November 1993 and June 1998. The banks named are Banque du Gothard, Banque Pictet, Banque President Olusegun Obasanjo, a Yoruba, is a Nigerian first. His Nationale de Paris (Suisse), Crédit Suisse, Goldman Sachs & Co, efforts to reestablish the nation after two decades of misrule are now Société Générale, Union Bancaire Privée and UBS. Several at risk from violence involving its two biggest ethnic groups, the companies, many of them fronts, are also listed. One of Abacha’s Yoruba and the Hausa-Fulani. The latest slaughter began where it all most prominent business partners, the Monaco-based Lebanese started two centuries ago, in the middle-belt city of Ilorin. Then, a tycoon Gilbert Chagouri, has offered to cooperate with the Nigerian rebellion by the Alafin’s army commander Afonja led to the collapse and Swiss investigators. The first plea submitted by Nigeria to of the Oyo Empire and capture of Ilorin by the Fulanis who were Berne listed Gilbert Chagouri, estimated by Nigerian officials to pressing southwards in their Islamic jihad. On 14 October this year have grossed a commission of 15 to 20 per cent on business placed Yoruba activists demonstrated in support of their wish to upgrade with him by Abacha. A second, revised, plea left him out; he paid their traditional chief, the Mogaji Are, to the title of Onilorin of an undisclosed fine following the cooperation deal. Ilorin. The supreme traditional ruler in Ilorin, Emir Alhaji Ibrahim Switzerland’s cooperation with the Nigerian probe was followed Sulu Gambari, called in the police. In the ensuing clash at least six by neighbouring Liechtenstein. So far two banks in Liechtenstein members of the Yoruba militant Oodua People’s Congress (OPC) have been named; Liechtenstein Landesbank, the home of the died. account of Technical Management Services, a company 75 per cent Next day shockwaves from the Ilorin incident reverberated in owned by Sani Abacha; and Verwaltungs-und Privat Bank (VPB), Lagos, the overwhelmingly Yoruba commercial capital, where scores the location of an account in the name of Raw Materials Development died a year ago in a previous round of interethnic fighting. In the & Trading, a company nominally owned by Abacha’s son Abba. suburb of Ajegunle, OPC members allegedly captured two Hausa Technical Management Services was a vehicle regularly used by men they claimed to be thieves and set them alight. Tit-for-tat Abacha to receive payments. Its accounts have been frozen at reprisals between Yorubas and Hausas grew into full-scale riots. Liechtenstein Landesbank in Vaduz and at its Geneva branch. The Governor Bola Tinubu imposed a dusk to dawn curfew. Eventually Raw Materials account at VPB held funds linked to a contract President Obasanjo banned the OPC outright, and ordered police to involving a German engineering company, Ferrostahl, and Texaco arrest its leading members. International, the trading arm of the large US oil corporation. Among the first to be detained was Dr Frederick Fasehun, a 64- Texaco’s consultant Ewald Schwarz, of Essen in Germany, put year-old physician who runs the Best Host Hospital in the Lagos together a scheme, lawful under Liechentenstein’d legal code, slum of Mushin. He founded the OPC in 1995, and spent 19 months whereby Texaco operated a contract awarded to Ferrostahl in in jail under General Sani Abacha. Still on the loose is Kayode repayment for an aluminium plant in eastern Nigeria. Ogundamasi, the 31-year-old OPC National Secretary of the Fasehun The crude oil awarded to Ferrostahl is said to have been faction; he goes by the name of ‘Sankara’, after Burkina Faso’s discounted by $2.50 a barrel below the official selling price, murdered revolutionary leader Thomas Sankara. Also underground leaving room for payment of a substantial commission into the is Ganiyu Adams, 30, who leads an ultra-militant OPC faction Liechtenstein account at VPB. The Raw Materials account is also opposed to Fasehun. The son of a truck driver who lived with his 3 27 October 2000 Africa Confidential Vol 41 No 21

family on the road, Adams was transformed by the 1993 election Quoting an old Yoruba proverb - Omo eni o ku buru titi ka fi fiasco into a Robin Hood figure for many of Lagos’ poor. f’ekun je (a child cannot be so notorious that the parents would There was deep anger among the Yoruba after the annulment of throw him to the den of leopards) - Fasehun appealed in a newspaper the presidential election, and the arrest of Chief , interview for a safe compromise on Yoruba unity. Adams and his who had won it, and of the human rights campaigner, Dr Beko supporters on the National Coordinating Council ousted Fasehun Ransome-Kuti, a member of the Yorubas’ grandest political (and as the OPC’s national coordinator. In exchange, Fasehun’s faction musical) dynasty; Kuti was alleged to have leaked news of trumped- expelled the Adams group for ‘hooliganism, anti-party activities up charges against a group of alleged coup plotters, including and unnecessary terrorism unleashed on innocent citizens.’ After Obasanjo. The peaceful campaigns of the main opposition Obasanjo’s victory in the February elections, OPC youths fought umbrellas, the Campaign for Democracy and the National the police for several days in Isolo and Mushin. Democratic Coalition, Nadeco, and of the traditional Yoruba The Adams camp claims that its leader was holding a press movement, Afenifere, were flagging. Many Yoruba intellectuals conference on 1 March when he learned that the police were and businessmen were asking once again whether their people arresting OPC members. He sent a delegation to the police station, should remain part of Nigeria. and the officer in charge ordered his men to fire on the OPC The OPC’s message of ethnic pride and vigilantism against activists; because the youths were protected by juju, the bullets crime and ‘moral degradation’ resembles that of other ethnic ricocheted, one hitting the officer in the abdomen, another striking militias - the Bakassi Boys in the east, the Egbesu Boys among the a drum of gasoline kept by the police for sale at black market prices Ijaws of the Niger Delta, and supporters of Sharia in the north. to Okada motorcycle taxis. Other witnesses said the OPC militants Together, they threaten the all-Nigeria ideals of Obasanjo’s elected attacked the station with petrol bombs and eggshells filled with government. The OPC took its name from Oduduwa, who according sulphuric acid. to legend was sent down from the heavens by his father, the The current Yoruba-Hausa fighting began in mid-July 1999 in supreme God Olódùmarè, with some soil, a cockerel and a palm nut the town of Shagamu, 36 miles north of Lagos, a traditional centre to establish the earth around the town of Ile Ife, which Yorubas of the kola nut trade where Hausas have lived for generations. A regard as their spiritual home. Hausa woman was caught allegedly watching traditional Yoruba religious rites known as Oro, and murdered. About 60 others were Struggling for autonomy slaughtered and dozens of homes, shops, mosques and market Like the old-guard Yoruba movement Afenifere, and the political stalls were burned to the ground, both in Yoruba neighbourhoods Alliance for Democracy - but much more forcefully - the OPC and in the mainly Hausa quarter known as Sabo. wants Nigeria to restore the powerful regional governments of the early independence days. The regions should run their own Ethnic militias proscribed schools, their own economies and, most controversially, their own Hausa victims of the Shagamu clashes fled to the northern city of police forces and armies. The Yoruba elite have long regarded Kano where, in retaliation, up to 70 Yoruba residents were killed themselves as the progressive spearhead of Nigerian society, first on 22 July, dozens were wounded, and hundreds were driven from against colonialism and then in opposition to military rule. They their homes. Adams’ followers ransacked Fasehun’s Best Hope are proud of their adoption of free education in the western region, Hospital, and Lagos was rocked by ethnic riots. The police blamed the once excellent universities at Ibadan and Ife, the first television Adams’ supporters, who had whipped up mainly local disputes. station, and the first skyscraper in Africa. In particular, they resent In November, Yorubas and Ijaws fought pitched battles in the the misrule which they blame on the Hausa military elite. Lagos slum of Ajegunle; some 40 people died. A few days later Defying the recent dictatorships, hundreds of Yorubas were shot Yorubas and Hausas set upon each other in the outlying suburb of dead in pro-democracy demonstrations. Abacha’s henchmen Ketu, in a dispute over control of the Mile 12 market. The death toll murdered Abiola’s wife Kudirat and the elderly Yoruba campaigner was believed to be at least a hundred. Obasanjo ordered police to Pa Alfred Rewane. In December 1998 security agents attempted shoot rioters on sight and told a national television audience that to blow up an aircraft carrying Abacha’s second-in-command, ‘When people decide to behave like animals they must be treated , the most senior Yoruba general (AC Vol 39 No 1); like animals.’ when that failed he was lured into seeming to support a coup plot, In the first few days of January the Adams faction went into and jailed. Yorubas have been the targets of northern conspiracies Mushin, claiming they intended to flush out some notorious armed - and at times their own worst enemies: internal divisions have gangsters on Akala Street who, they said, had shot dead a young opened the door to external manipulation. woman who happened to be an OPC member. At least 50 people The OPC has split since Gen. Abdulsalami Abubakar’s were killed in the mayhem, and burnt corpses littered the road. transition to civilian rule. Adams claimed that the Fasehun faction Local residents told Governor Tinubu that, before the OPC’s had sold out the movement’s ideals. The OPC had rejected arrival, life had become unbearable and the local police were doing Abubakar’s transition programme, arguing (like many human rights nothing about it. They accused the police of involvement with the activists and minority groups) that Nigeria first needed a ‘sovereign criminal syndicate, and dubbed the special anti-crime unit, the national conference’ - a meeting of all its ethnic groups, to determine RRS, ‘robbers reign supreme’. whether Nigeria should be a unitary state, a federation, or a loose The Lagos police offered a reward of 100,000 naira (US$930) confederation in which all ethnic groups would enjoy wide political for information leading to the arrest of Adams, who has been on the and cultural autonomy. In late 1998 Dr Fasehun met the presidential run for the past eight months. After the police blamed the OPC for candidates, Olu Falae and Obasanjo. Adams described that as the abduction and murder of a police superintendent in the Bariga associating with discredited mainstream politicians, and broke neighbourhood of Lagos, the security forces went on a rampage, away when the doctor declared his support for the mainstream emptying houses of suspected OPC members, burning their Alliance for Democracy and Falae, its presidential candidate. belongings, beating their relatives and arresting hundreds of young 4 27 October 2000 Africa Confidential Vol 41 No 21 men. Obasanjo urged Governor Tinubu to crack down on the OPC The September riots, which left hundreds of African migrants and threatened to impose a state of emergency in Lagos. Now he dead, show the tensions beneath the usually calm exterior of the has banned all ethnic militias, but few Nigerians believe that the Jamahiriya (State of the Masses). They also suggest that in OPC, or its counterparts in the Niger Delta, the east and the north, Gadaffi’s Libya, frustrations are usually channelled into targets will easily go away. away from the Qaid (Guide). In late September the Justice and Public Security Secretary, LIBYA Mohamed Belgasem al-Zuwi, was sacked, probably on account of the massacres. Zuwi was replaced by Abdelrahman Musa al- Abbar, a colonel in the Jamahiriya Security Organisation headed by Gadaffi’s brother-in-law Abdallah al-Senoussi. Gadaffi’s prime time Gadaffi promised earlier this year to appoint, at last, a formal Western governments reopen business with head of government. At 58 he is now regarded, like Hafez al- Tripoli but the Colonel hasn’t changed Assad in Syria and Saddam Hussain in Iraq, as an Arab nationalist of the older generation, expecting to pass on power to his own Rarely can Moammar el Gadaffi have felt so secure. Even dynasty. His biggest problem may be to channel his sons’ ambitions thinking United States politicians now accept that an end to in the same direction without more political havoc. sanctions is inevitable, whoever wins the November presidential It is not just US oil men like Conoco’s chief executive, Archie election. United Nations sanctions have been suspended, and large Dunham, who call for Washington to open up. Even while the cracks are showing in the prosecution case at the Lockerbie trial at Lockerbie trial continues, Britain’s Trade Minister Richard Camp Zeist in The Netherlands; a line may soon be drawn under Caborn, and junior Foreign Minister John Battle, have called on a major cause of friction with the West. The Islamist insurgency British companies to join yet another trade mission to Tripoli - this of the late 1990s has diminished, and the Libyan state, under one led by a long-time fan of business with the Jamahiriya, former pressure to deliver social benefits, is mightily helped by oil at more Conservative junior minister Sir Jeremy Handley. Italy is in the than US$30 per barrel of crude, which will yield a bumper $11 lead, with ENI planning a multi-billion-dollar gas pipeline; French billion in exports this year. business is impatient, although a French court ruled in mid- Family affairs The family of Colonel Moammar el Gadaffi is the centre of political 16). And Sayef received Germany’s Foreign Minister, Joschka attention. Doyenne of the Gadaffi Al-Dam branch is the Guide’s wife, Fischer, when he visited Tripoli after the hostage release. Safia el-Brassai, who emerged in public last year for events including Saidi wears the number 10 shirt in Libya’s national soccer team and the extraordinary Organisation of African Unity (OAU) summit in for his beloved Al-Ahly club, while holding the rank of army major. He September 1999. Safia is Gadaffi’s second wife; the first was Khairia is known as ‘the hooligan’, and his public image siphons off much of Ennouri, daughter of a Tripoli merchant, they married in 1970. the abuse which might otherwise be directed towards his father and Before divorcing they had one son, Mohammed, now conspicuous brother. In August, Islamists helped stir up unrest among supporters as Chairman of the Libyan Olympic Committee and of Tripoli’s Al- of Benghazi’s Al-Ahly club, claiming that Saidi, as head of the Libyan Ittihad football club, whose arch-rival Al-Ahly is dominated by General Football Union (LGFU), was acting against their own club’s Gadaffi’s second son El-Saidi. In 1996, a match between the two interests. Saidi resigned as LGFU Chairman, at (he says) his father’s clubs ended with riots and at least eight deaths, when Al-Ittihad fans request; clubs have since ‘pleaded’ for him to return. He remains a key started chanting anti-Gadaffi slogans. Mohammed, rivalled by the to the youth ‘vote’, not least through his ally Colonel Jomaa al- Gadaffi Al-Dam sons, occasionally plays official roles such as Morrafi’s ‘Gadaffi Brigade’ of the Guide’s under-privileged fans. representing Libya at the funeral of King Hussain of Jordan. Football has helped Saidi to build an international network. In The family history has been hazy. In a 1985 Sunday Times Tunisia, now in rapprochement with the Jamahiriya, his friends interview Gadaffi was pictured with son Hannibal and his now include Slim Cheboub, President Zine el-Abidine Ben Ali’s powerful glamorous 24-year-old daughter Aïcha. That year Gadaffi claimed businessman son-in-law - and President of Tunis’ mighty Espérance seven children: but there is no public record of the whereabouts of the club. Other friends include Jordan’s King Abdullah II. Saidi’s youngest three sons listed then, Hannibal, Sayef el-Arab and Khamis. military rank has also allowed him to cultivate a new generation of Moammar and Safia adopted a baby daughter, Hana, in 1985; she young officers, the class who propelled his father into power in 1969. was said to have been killed the next year when the United States Rising through the ranks is Al-Motassim Billah, a doctor in his Airforce bombed his home and the Bab el-Aziziya barracks. But a 15- early 20s, brought up in the military establishment - including a spell year-old daughter called Hana was pictured with Nelson Mandela of training in Egypt - and said to have been protected by his father’s and Graca Machel in South Africa in June 1999, along with the other old ally Abou Bakr Younes Jabir, one of the original Unitary and Free Gadaffi women. Officers who led the coup against King Idriss Al-Sanoussi. The three elder Al-Dam sons are making an impact. The eldest, Gadaffi’s daughter Aïcha is emerging in her own right. On 22 Mohammed Sayef al-Islam, regarded as a playboy, led negotiations September she met Iraq’s President, as head of the latest humanitarian (steered by Libya’s former Ambassador to Manila, Abdel Rajab mission to fly into Baghdad’s Saddam Hussain International Airport. Azzarouk) to release European hostages held by Muslim rebels on the On a visit to London in July (with her mother and a big security Philippine island of Jollo last month. entourage) Aïcha slipped across the road from the Dorchester to Twenty-eight-year-old Sayef al-Islam heads the Gadaffi Speaker’s Corner, where she made an oration in favour of the Irish International Charity Foundation (GICF), which finances causes Republican Army. This embarrassed the British authorities, who have abroad. Sayef has travelled extensively and in 1997 studied in quietly been admitting family members - and especially Her Majesty’s Austria; he maintains business interests there, and helped the right- Ambassador to Tripoli, Richard Dalton, a vocal advocate of ‘UK Ltd’ wing leader Jörg Haider to cultivate Gadaffi senior (AC Vol 41 No in Libya.

5 27 October 2000 Africa Confidential Vol 41 No 21

October that Gadaffi can be prosecuted for the 1989 explosion of brought in from the cold, with an apparent rapprochement between a UTA DC-10 airliner over Niger. The Lockerbie and UTA affairs Gadaffi and his former number two, Abdessalem Jalloud. Even have not cooled the enthusiasm of Romano Prodi, the European former opponents have been co-opted, such as Abdelmonen el- Commission’s Italian President, for improving ties with Libya. Houni, appointed Libya’s representative to the Arab League in Yet Libya breaks all the rules of global business. Gadaffi has no September. interest in following other African economies towards liberalisation, in accordance with International Monetary Fund and World Bank theology. His idea of economic reform means scaling down ANGOLA ministries and a chaotic ‘decentralisation’, mainly benefiting his home region of Sirte. A powerful state will continue to dominate the economy. Senior officials will decide which foreign companies Going straight - again get the major contracts, on the basis of strategic, ideological and Yet another economic reform programme is personal preference: international competitive bidding isn’t a riding on the oil boom popular idea. Friendly governments understand this, notably South Africa, whose officials have promoted their expanding Is President José Eduardo dos Santos’ government, slopping power utility Eskom, and other big companies, during several around in oil revenues, serious about economic reform at last? visits to Tripoli. Luanda officials claim it is, pointing to Dos Santos’ appointment of Gadaffi tinkers with the government’s structure. Among recent Julio Bessa, a technocrat, as Finance Minister on 9 October, and to changes, the Chairman of the National Oil Company (NOC), encouraging noises from the International Monetary Fund. Luanda Abdullah Salem al-Badri, was promoted to Deputy Secretary signed a monitoring agreement with the IMF in April, and hopes to (minister) for Services Affairs, according to a decree of the General agree terms for a low-interest loan from the Fund early next year. People’s Congress dated 30 September. Badri, a former energy This, optimists contend, would trigger a slew of World Bank loans secretary, had been at the head of NOC only since Gadaffi’s big for the social sector - along with some relief on the US$9.6 billion reshuffle in March, when 11 secretariats were eliminated. His foreign debt. appointment was welcomed by the international oil companies; his Officials make much of Bessa’s stint as a postgraduate economics new responsibilities include health, education and transport in an student at New York’s Columbia University in the early 1990s. even more minimalist administration, now also shorn of its Insiders say he is capable and has, for now, the full backing of information secretariat. President Dos Santos. They say less about the minister’s tutoring in command economics in Moscow in the 1980s, after which he Post-sanctions business helped draw up an early attempt at reform - the Saneamento Optimists think such changes signal a more business-like Econômico e Financeiro (economic and financial cleansing) of Jamahiriya is preparing for the post-sanctions era. In a crackdown 1987 - which failed to cut either the huge budget deficits or on corruption the Libyan Central Bank’s Deputy Governor, Al- spiralling inflation. Azili Abdessalam Brini, replaced long-serving finance secretary Bessa faces daunting precedents. Angola’s economic Mohamed Beit al-Mal, after a notorious Benghazi banking scandal. management has been dogged by inconsistency. In the past decade Farhat Omar Bin Gueddara became Central Bank Governor. there have been nine finance ministers and five governors of the Corruption and criminality run deep in Libya: many think that Banco Nacional de Angola, the central bank; since 1987 there have the pogrom against West African migrants was prompted by a turf been nine different reformist or counter-reformist economic war between local mafia, including drug dealers, and their programmes, each launched with much fanfare and strong competitors from Nigeria and elsewhere in . The presidential backing. Leadership of reform efforts has oscillated migrants had become assertive, settling into Azzawiya and other between the Finance Ministry and Planning Ministry, neither of locations around Tripoli, as Gadaffi promoted his version of which has managed to rein in the state oil company Sonangol, or the African unity. Libyans claim there may be as many as two million officials in the presidency who have the final say over oil revenues. migrants; certainly there are hundreds of thousands. In the past, Bessa was Deputy Secretary-General of the cabinet (council of tensions have been followed by mass expulsions. This time, ministers) and is a trusted member of the presidential circle. He is Gadaffi’s generosity to some West African rulers was underlined close to the Minister of Public Works, António Henriques da when the Foreign Minister of Côte d’Ivoire, Charles Gomis, Silva, whose standing is boosted since the windfall from higher oil visited him just before his country’s presidential election on 22 prices and output means more money for public works contracts. October. A cheque for some US$10 million from the Jamahiriya Bessa’s predecessor at Finance, Joaquim David, becomes Minister was forthcoming, we hear. of Industry, replacing Albina Faria de Assis Pereira Africano, Nobody talks in public about the succession. The Guide is now Angola’s candidate for Executive Secretary of the Southern striving to bring a new generation of soldier executives into the African Development Community (SADC). family business, and to manage the influx of foreign capital and Frequent changes of Finance Minister help the presidential circle companies into the hitherto closed society. High oil prices will at Futungo de Belas, the presidential palace, to stop any individual help buy off immediate social pressures. The Islamic insurgency becoming too powerful in the job. It also provides the presidency which threatened in the mid-1990s seems to be waning, and there with scapegoats when reforms fail. ‘Moving around the chess is little talk of oppositionists in the army, whose potentially pieces will change absolutely nothing,’ said Luis Nascimento of troublesome units are closely watched by a variety of security the opposition minority party, Frente para a Democracia. services under the watchful eyes of head of security Moussa Few would write off Joaquim David’s career yet. He was Korsa, military security chief Colonel Khouildi al-Hameidi and appointed Finance minister in January 1999, when funds were Col. Khalifa Ahnish al-Dorbashi. Former rivals have been squeezed by war against Jonas Savimbi’s União Nacional para a 6 27 October 2000 Africa Confidential Vol 41 No 21

Independência Total de Angola (UNITA) rebels, low oil prices and huge foreign repayments of oil-backed loans. The government RWANDA/CONGO-KINSHASA then wanted a finance minister who had the confidence of bankers involved in organising such loans, and who could raise new ones, even if that meant mortgaging the country’s oil production further into the future. When oil prices were still low, David negotiated a Conditional offers new $575 million loan led by Warburg Dillon Read in mid-1999. All the Congo combattants talk peace and This, combined with signature bonuses of around $900 mn. on new prepare for war oil exploration contracts, set the stage for large new arms purchases, which in turn helped the government score some critical victories Fresh peace initiatives for the Democratic Republic of Congo against UNITA, although Savimbi still commands a formidable look pointless, as government, rebels and their respective sponsors guerrilla force. gear up for more fighting. The last regional summit on Congo, in David’s expertise in oil-backed loans may now be in less demand, Maputo, Mozambique, on 16 October, committed all sides to as the government tries more orthodox, and less exorbitant, ways move their forces 15 kilometres back from the present positions of raising money. But he remains closely linked to the state oil they hold. But neither of the main rebel movements, the Rwandan- company, and his help is required in other areas: Sonangol’s backed Rassemblement Congolais pour la Démocratie (RCD) and economic role is central not just because prices are high and Jean-Pierre Bemba’s Mouvement de Libération de Congo (MLC), production is rising (set to double to 1.45 mn. barrels a day by were present, and both ruled out troop withdrawals. South African 2004), but also because the company has contracted several joint President Thabo Mbeki played up peace prospects when he visited ventures with banks and aviation companies, and with businesses Kigali on 19-20 October, but he prudently stressed that Zambian in the Democratic Republic of Congo. President Frederick Chiluba is the real regional mediator. The IMF wants to see Angola wean itself completely from high- Bemba effectively abandoned the Lusaka agreement months priced oil-backed loans, replacing them with cheaper credits from ago, arguing that he had to resist attacks from Congolese President the Fund, the World Bank and the African Development Bank, Laurent Kabila and his allies in the north-western province of which have greater powers to inquire into corrupt or mismanaged Equateur. The RCD and the Rwandan government had in August financial schemes. Angola’s elite has done well out of these arcane proposed unilateral disengagement, suggesting a ‘corridor of peace’ and opaque arrangements, and doesn’t share the Fund’s enthusiasm in the heart of Congo. But the Rwandan Chief of Staff, Major- for change. Luanda’s rare technocrats with influence have made it General Kayumba Nyamwasa, emphasised that this depended on clear to Dos Santos that the government cannot escape the economic the swift deployment of hundreds of United Nations peacekeeping morass - no matter how strong the oil price - without thoroughly troops. The UN Observer Mission in Congo (Monuc) has no armed restructuring its foreign debt and ending secret oil credits. troops, only 258 observers, and a mandate extended by the UN Security Council only until 15 December. Doing the Futungo shuffle Rwanda’s President Paul Kagame says the situation has got Aguinaldo Jaime, the respected Central Bank Governor, looks worse since Maputo, and communiques from the RCD (put out by secure in his post for now. The wily Jaime has managed to take ex-Mobutuist Kin-Kiey Mulumba) emphasise the new government over some of the Finance Ministry’s functions, and to dump much attacks in Kasaï and Katanga. In South Kivu the militias of the so- of the blame for economic failures - depreciation of the kwanza, called ‘negative forces’ - the Burundian Forces pour la Défense and annual inflation at over 350 per cent - on David. Jaime’s stock de la Démocratie (FDD), the Rwandan Interahamwe and former with the international organisations is high, and he has established Forces Armées Rwandaises (ex-FAR), and the Congolese Mai a measure of independence from the presidential power-brokers. Mai, united by their anti-Tutsi zeal - are highly effective, particularly In the longer term he will have problems, but for now Dos Santos around Uvira, close to the frontier with Burundi. Kagame has just needs him for the negotiations with the Fund. hosted a well-received Unity and Reconciliation Conference, and On 17 October Dos Santos announced another mid-level reshuffle faces an important meeting with donors in November. President among staff at Futungo de Belas. Sabino Ferraz becomes Kagame will bide his time on Congo, but he has by no means ruled presidential economic advisor in place of Teodoro Lima da out a military solution. Paixão Franco Junior, who in turn will spend more time administering a recently launched government fund which aims to Visit our website at: www.africa-confidential.com kick-start local businesses with some of the new oil money. Carlos Published fortnightly (25 issues per year) by Africa Confidential, at José Manuel has been appointed head of security and intelligence 73 Farringdon Road, London EC1M 3JQ, England. Tel: +44 20-7831 3511. Fax: +44 20-7831 6778. (Sinfo), a post that had been vacant for some months. António Copyright reserved. Edited by Patrick Smith. Deputy: Gillian Lusk. Lourenço has been fired (with no official replacement) as director Administration: Clare Tauben. of personal security; José João Maua becomes interim director of security services at the presidency, and Carlos Teixeira is the new Annual subscriptions, cheques payable to Africa Confidential in advance: UK: £278 Europe: £278 juridical advisor to the President. Africa: £258 US:$697 (including Airmail) The long-serving Victor Lima (expected to be Ambassador Rest of the World: £361 to Japan) has been replaced as presidential diplomatic advisor Students (with proof): £79 or US$126 All prices may be paid in equivalent convertible currency. We accept by Carlos Alberto da Fonseca, Carlos Maria da Silva Feijo American Express, Diner’s Club, Mastercard and Visa credit cards. was given the new post of advisor for regional and local affairs, Subscription enquiries to: Africa Confidential, PO Box 805, Oxford OX4 while José Alberto Puna Zau gains influence over 1FH England. Tel: 44 1865 244083 and Fax: 44 1865 381381 infrastructure contracts as the new director of the cabinet for Printed in England by Duncan Print and Packaging Ltd, Herts, UK. ISSN 0044-6483 public works. 7 27 October 2000 Africa Confidential Vol 41 No 21

of his FPI and the officers in the army and And Mugabe faces open manoeuvering by senior Pointers gendarmérie who refused to back Gueï as popular ZANU-PF officials to persuade him to announce resistance mounted on 24 and 25 October. But at his retirement; and clandestine scheming to present least six of Gbagbo’s supporters were shot dead the President with the metaphorical revolver and CÔTE D’IVOIRE during the protests and his followers don’t share bottle of whisky. his magnanimity towards the army and police. The ZANU-PF barons are being urged on by There are, too, worsening divisions in the Western bankers and finance officials who promise Milosevic effect security forces. Most resented in the military Zimbabwean ministers that, as soon as Mugabe were Gueï’s personal militia, theBrigade Rouge resigns, credit lines will reopen and help from the The flight of military leader General Robert Gueï which came under attack from an infantry battalion International Monetary Fund and World Bank to Benin and the assumption of the Presidency by at the Akouedo military camp in the early hours of will follow. The financiers’ concerns were Laurent Gbagbo, the winner of the 22 October 25 October. The army is some 7,000 strong but reinforced by a letter sent from the Reserve Bank election, solves one problem but creates several morale is low, weakened further by low pay, poor of Zimbabwe on 10 October to foreign creditors. new ones. The chasing of Gueï from power in a equipment and preferential treatment given to the It reads: ‘Zimbabwe has accumulated arrears with courageous display of people power - his guards Brigade Rouge and Presidential Guards. There respect to the World Bank and African were firing live ammunition into crowds of are traditional rivalries between the army and the Development Bank as well as some bilateral and protesters - is being celebrated as an African 4,500-strong gendarmérie whose recruits are commercial creditors. A programme to pay these reenactment of the overthrow of Yugoslav generally more educated and get better pay and arrears, beginning with the Word Bank, has been President Slobodan Milosevic and may have training than their army colleagues. put in place. . .’ But it does not explain how or repercussions in other countries such as Zimbabwe Both outfits have proved unreliable in the past. when the government will start to meet its foreign (see below). The gendarmérie refused to protect the previous obligations again. That, say bankers in Harare, is The biggest problem is what to do about those civilian President, Henri Konan-Bédié, when he because no one knows. politicians excluded from the polls - the was overthrown by a military putsch last December Rassemblement des Républicains’ Alassane (AC Vol 41 No 1). This year the army has UK/AFRICA Dramane Ouattara and the Parti Démocratique mutinied twice against Gueï’s leadership; both de la Côte d’Ivoire’s Emile-Constant Bombet - times he took refuge in the gendarmérie’s barracks. and their demands for fresh elections. As soon as The circumstances of the attack on Gueï’s Gueï fled, the RDR appealed to France not to residence in September are still not clear: he Preferment recognise Gbagbo as President until he had pledged accused his former second and third in command The sacking and subsequent police questioning of to hold free and fair elections. - Gens. Lansana Palenfo and Abdoulaye Michael Lunt, an Egypt desk officer at Britain’s Western diplomats in Abidjan are trying to Coulibaly respectively - of complicity in an Department of Trade and Industry, raises new encourage Gbagbo to form a transitional attempted assassination plot against him. concerns about the accountabilty of British trade government of national unity, including ministers The two have been under protection in the promotion efforts in Africa, business sources say. form the RDR and PDCI, before holding legislative Nigerian Ambassador Kehinde Olisemeka’s The DTI’s Africa director, Peter Tibber, and fresh presidential elections early next year. house in the Cocody district of Abidjan since Gueï confirmed Lunt’s dismissal but his colleagues Gbagbo, a veteran oppositionist and history issued warrants for their arrest. Relations between were reluctant discuss details for fear of professor who has been detained by successive Gueï and Nigerian President Olusegun Obasanjo jeopardising the investigation. PDCI governments, including one in which deteriorated sharply after this - and a mysterious Lunt’s dismissal comes against the background Ouattara was Prime Minister, shows little interest bomb explosion which killed four Nigerians at an of some British companies’ growing dissatisfaction in formal power-sharing and absolutely no interest Abidjan bus station. The return of Palenfo and with the effectiveness and transparency of the in rerunning the presidential polls. But Gbagbo, Coulibaly, both partisans of the RDR, to the army DTI’s promotion efforts. British-based companies whose Front Populaire Ivoirien is ostensibly left- command should boost Ouattara’s bargaining which organise trade missions and coordinate wing and affiliated to France’s Parti Socialiste, power in the coming weeks. conferences and trade fairs to push British business has a record of pragmatism and deal-making. His are highly critical of the apparently arbitrary way government inherits an economic situation even in which the DTI has let contracts to promoting more parlous than that inherited by Gueï last ZIMBABWE agencies. December: he will be under heavy pressure to They cite the example of one company with reach an agreement with France and the European negligible African experience favoured with a Union to bring in economic assistance. Bobodan’s battles contract to organise an exhibition in East Africa FPI officials deny that Gbagbo harbours any Two weeks of mass opposition protests and clashes against other established companies with proven grudge against Ouattara but insist that Gbagbo’s with the army and police have further weakened track records in the region. Over the past decade presidential victory should stand despite the low President Robert Mugabe and his opponents British companies have been overshadowed in turn out - about 35 per cent - and the exclusion of draw parallels with the overthrow of Yugoslav Kenya by their French and South African rivals. two leading candidates. Ivoirians with a sense of President Slobadan Milosevic this month. The There are no clear criteria for the bidding regional history fear a repeat of Nigeria’s 1993 key difference is that Milosevic lost his grip on the companies’ eligibility; instead an informal system poll fiasco in which the military outmanoeuvred military and intelligence services in the critical of personal preference seems to be operating. A civilian politicians who were quarrelling over the days after losing the federal election. Until now businessman told Africa Confidential that a DTI legitimacy of an election. Mugabe has kept his security, if not his party official had asked him to bid for a specific Africa The second problem is how to keep the army hierarchy, loyal. promotion contract, only to be told a fortnight and the gendarmérie in check: their refusal to Although many believe Mugabe’s Zimbabwe later that his company was then deemed unsuitable defend Gueï in the face of mass protests in Abidjan African National Union-Patriotic Front really lost for unspecified reasons and the bid should be on the morning of 25 October and the defection of the 24-25 June elections, the opposition Movement withdrawn. key officers such as Colonel Matthias Doué and for Democratic Change didn’t take on the regime There is no public audit on the DTI’s trade Captain Saint Cyr Djikalou finally forced the with mass protests immediately. Now MDC leader promotion efforts in Africa, their cost effectiveness military leader to flee. Gbagbo knows the political Morgan Tsvangirai now calls for a Belgrade- and benefit to British business. The planning of and military axes are closely linked. In his style uprising in Harare and Bulawayo if the missions, exhibitions and trade fairs is often television broadcast immediately after Gueï’s party’s efforts to impeach Mugabe in parliament hampered, companies complain, by DTI officials flight, he paid effusive tribute to both the militants fail. MDC supporters now call Mugabe ‘Bobodan’. lack of basic knowledge about conditions in Africa. 8