www.africa-confidential.com 28 June 2002 Vol 43 No 13 AFRICA CONFIDENTIAL NIGERIA 3 Banker versus banker The Central Bank is trying to End of an Alliance impose order on Nigeria’s 100 Squabbles and scandals are now destroying the only opposition banks: many make big profits from which really mattered illicit foreign exchange deals. One The most serious opposition group, the Democratic Alliance (DA), has been gravely wounded by solution would be a single exchange rate, although that could corruption allegations and political misjudgement. The governing African National Congress is sticking put several banks out of business. the knife in deeper with a new law allowing elected representatives to defect to other parties without losing their seats. The ANC stresses that such a law operates in most European parliaments but its clear aim is to give it control of all nine provinces and all main provincial and city councils. FRANCOPHONE WEST In the two opposition-controlled provinces, and kwaZulu-Natal, enough opposition AFRICA 4 representatives want to cross the floor to give the ANC majority control. The ANC’s advantage is mainly due to opposition incompetence; the biggest personal loser is the DA’s (45), whose energetic The voters’ friend and pragmatic leadership once rattled the government. After a decade of ‘democratising’ The national parliament passed the Floor-Crossing Legislation on 20 June but opposition parties argue some Francophone countries are that it violates voters’ rights and want the courts to stop it. The case, heard by the Cape High Court on starting to see real change brought about through the ballot box. 24 June, will probably be referred to the Constitutional Court and the bill will most likely go through. Others are still struggling to Pressure is mounting for a wider review of electoral law: a cross-party lobby wants to move away from convince their veteran rulers of the proportional representation to a mixture of candidates’ lists and single-member constituencies. benefits of retirement and, while France urges reform, President Crossing the floor Chirac’s networks are not necessarily helping. In the Western Cape, New National Party (NNP) leader and his group have defected from the DA coalition (AC Vol 42 No 22) and the ANC will gain control of the provincial government if and when the Floor-Crossing Legislation is finally passed. If it applies nationwide, four ERITREA 6 potential defectors in the kwaZulu-Natal legislature would give the ANC 41 of the province’s 80 seats. ANC supporters speak of replacing the Premier, Lionel Mtshali, with their own Disarmed but not S’bu Ndebele. Inkatha naturally claims that the Floor-Crossing bill applies only in Western Cape. More demobbed darkly, Inkatha leader warns that the ANC risks re-igniting the struggle that Donors have lost patience with bad killed thousands of people in kwaZulu-Natal in the early 1990s and nearly scuppered the 1994 elections. governance, harsh treatment of The legislation coincides with a crisis in the DA over its links to Jürgen Harksen, a businessman political prisoners and clampdowns wanted in Germany on multi-million dollar fraud charges. In March, Harksen claimed that he had paid on the press. Development aid the DA Mayor of , Gerald Morkel, 785,000 rand (US$78,000) for political protection and has all but dried up and President influence. Harksen also implicated Leon Markowitz, a former Western Cape Finance Commissioner Issayas has asked conscripts to stay on an extra two years to work and DA fundraiser. for the government. Morkel and Markowitz denied Harksen’s claims but admit to an ‘inappropriate relationship’ with him. A government commission in Cape Town is inspecting documents seized from Harksen, including receipts of Morkel’s legal accounts, letters promising donations to the DA and telephone records. They MOZAMBIQUE 7 appear to bear out Harksen’s claim that he contributed to Morkel’s rent, bankrolled his litigation and made a sizeable party political donation. Harksen also alleges that Morkel was linked to Vito Palazzolo, a Seconds out convicted money launderer and alleged Mafia boss (AC Vol 40 No 3). Frelimo has picked veteran Morkel was investigated by a crack police intelligence unit, the Scorpions. To preserve their secrets, Armando Guebuza as its Morkel and other DA officials bought expensive anti-bugging equipment and met in the basement of the presidential candidate in 2004, despite opposition from President city council in what they called ‘the bubble’, an area meant to be secure from electronic surveillance. Chissano. ‘Guebas’ will hope to They sat on aluminium beach chairs, which they thought would block electronic signals. The chairs keep the lid on scandals and to turned out to be useless: the Scorpions produced clear recordings and transcripts. appease donors by limiting The DA denies the allegations and Morkel insists that each document has an innocent explanation. The corruption. DA has promised a forensic audit of its accounts but, politically, the sleaze may stick and will anyway disrupt its claim to offer an alternative to ANC sleaze. Morkel is still Cape Town Mayor, though POINTERS 8 suspended from official duties. Founded in July 2000, the DA brought together the Democratic Party (mainly white, economically Ghana, Zimbabwe, conservative) and the NNP (successor to the former apartheid National Party and the official opposition World Bank/DRC & in 1994-99). The alliance had no chance of unseating the ANC but provided the serious parliamentary opposition missing since Inkatha locked itself into a coalition with the ANC. The ANC’s chief blunder was opposing the dispensing of anti-retroviral and other anti-HIV/AIDS 28 June 2002 Africa Confidential Vol 43 No 13

which governed the province. What’s left of the opposition Old-style DP liberals at first opposed the July 2000 DP-NNP merger but veteran liberal Colin Eglin and voice of conscience Helen Suzman ● The Pan-Africanist Congress: Since the African National Congress endorsed it. Leon became leader, with NNP boss Van Schalkwyk as won power, the PAC has lacked a role or clear political identity. Its five deputy. The Alliance managed to get Cape Town’s very capable ANC members of parliament and one representative in the Northern Province Mayor, , replaced by NNP populist . assembly have proved uninspiring. In exile, the ANC proved more adept The NNP became a ‘coloured’ (mixed race) party with its main at playing both its Western hosts and communist donors; in the early support base in the Western Cape. Its coloured politicians gained 1990s, the PAC’s insistence on armed struggle alienated many. Its dour confidence. Marais and Morkel, both keen entrepreneurs and popular leader, Reverend Stanley Mogoba, holds on at the expense of the more in working-class neighbourhoods, demanded rank and power. The old energetic , a former trades unionist. Secretary General NP had run patron-client politics for its former white Afrikaner Thami Plaatjie focuses on poor people’s grievances, especially on land constituency; Marais and Morkel skillfully ran similar operations for for housing, but that doesn’t translate into sustained support. their own community. This was very different from the closed ● Azanian People’s Organisation: Proclaiming ‘black consciousness’, decision-making of Leon, Selfe and Coetzee. NNP leaders, especially Azapo was never a mass organisation but enjoyed some sympathy among Van Schalkwyk and Marais, disliked that style and the influence of the black intellectuals. It boycotted the constitutional negotiations and the young Coetzee. first democratic elections. In the June 1999 poll its mere 100,000 votes won it one seat, for its national Chairperson Mosebudi Mangeni. The Inkatha and friends ANC has slowly siphoned off its brightest leaders: Itumeleng Mosala DP MPs began to criticise Leon’s leadership style and DA politics. DP (deputy Education Minister), Mojunki Gumbi (Legal Advisor to strategists met potential allies behind NNP leaders’ backs. Selfe President Thabo Mbeki). It recently opened membership to whites and talked to Mario Ambrosini, one of Buthelezi’s controversial advisors, is no threat to the ANC. seeking Inkatha support to get on to parliament’s key Security and ● United Democratic Front: Formed by disgruntled politicians from the Intelligence Committee, so far blocked by the ANC. In return, the DA ANC under and the New National Party under Roelf offered to drop its objections to Inkatha’s support for unelected Meyer, it has failed in its quest to form a national party that breaks with traditional leaders in local municipalities. race. Meyer retired from politics soon after the UDF was formed in 1999. Ambrosini, an Italian, is a private consultant to Buthelezi in his Holomisa’s wing now looks no more than a Xhosa-speaking faction from capacity as Home Affairs Minister. Ambrosini is wary of the ANC, the rural Eastern Cape, the worst governed ANC province. Another with which Inkatha is allied at national level, giving the IFP two seats Xhosa, ex-President Nelson Mandela, unsuccessfully wooed Holomisa in the national cabinet and a share of power in kwaZulu-Natal. but he has flirted with the PAC. The DA was riding high; Leon, not Van Schalkwyk, reaped the ● Inkatha Freedom Party: The Zulu former ‘cultural movement’ lost resulting popularity. The party embarrassed President Thabo Mbeki much significance when it allied with the ANC nationally and in its by leaking his private correspondence with Leon (penned by DP native kwaZulu-Natal. Eight years ago, the IFP was a real force, not least researchers) on the government’s flawed HIV/AIDS policy. Western as one side of the political violence in Johannesburg and kwaZulu. Now Cape was the only provincial government dispensing anti-retrovirals it is preoccupied by issues of traditional leadership and the Zulu monarchy. to HIV-positive pregnant women; Cape Town and Western Cape were The ageing Mangosuthu Buthelezi, who came to fame as leading showing above-average economic growth rates, education results and warrior in the film ‘Zulu’, personifies Inkatha and has no apparent health statistics. The Alliance, though, was starting to crack. successor. The DA leadership was frustrated by Marais. He made anti-gay drugs by the public health service. Its reputation was further weakened remarks in a city with a vocal gay community and told Christians to by its handling of a $6 billion arms deal (and its manipulation of a choose between the Bible and the country’s constitution. parliamentary inquiry into it) and its ambiguous stance on land Alleged irregularities marred a referendum last May to rename two seizures and the disputed elections in Zimbabwe. Continuing high Cape Town streets after Mandela and Frederik Willem de Klerk. DA unemployment and poverty have fuelled disputes with its allies in the leaders suspended Marais, but he won reinstatement after a court trades unions and left-wing bodies. battle. The DA looked foolish; NNP politicians, led by Van Schalkwyk, The DP was formed in 1989, just before Nelson Mandela’s release began talking secretly to the ANC (Marais met National Chairman from Robben Island, as a repository of liberal values, funded by big Mosiuoa ‘Terror’ Lekota). Finally, the Alliance broke. business. For the next five years it floundered, as the ANC and NP led The ANC was planning its Floor-Crossing bill to win control of the constitutional negotiations, then the first free elections. Cape Town and the Western Cape. Morkel and several councillors The DP polled a dismal one per cent in April 1994 and the dynamic decided to stay with the DP in the now-weakened Alliance. Morkel Leon replaced Zac de Beer, a former Anglo American Corporation was rewarded by promotion to . Marais became director, as leader. provincial Premier, with a new NP-ANC provincial cabinet. Leon energetically changed the party’s image; its seven members of With Morkel and the DA fundraisers embroiled in the Harksen parliament soon established the DP as a vigorous and probing opposition. scandal, Tony Leon’s party is foundering. His combative style (which At the 1999 elections, with the campaign slogan ‘Fight Back’, the DP can sound patronising, even racist) plays badly with the black electors won over ten per cent of the national vote and 38 parliamentary seats. that the DA desperately needs. Its leading black MP, Joe Seramane, However, it was too small for comfort and on the eve of the 1999 polls joined the Alliance in reaction to the ANC’s treatment of his brother’s Leon, with DP national Chairman James Selfe and political strategist death in an ANC guerrilla camp while in exile; he would fare no better Ryan Coetzee (in his late 20s and with little political experience), than Leon. decided to woo NP supporters. To be taken seriously, the DP needed The party’s rising leaders are white, most notably the young MP a base, and control of a provincial government. In Cape Town, the Nick Clelland. With its integrity in question and its appeal to black ANC achieved its slim majority through agreements with the NNP, voters limited, the DA now faces a tough future.

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The rest of the economy is in trouble: manufacturers are operating at NIGERIA about 35 per cent of capacity and unemployment is growing fast. The government’s economic management – money supply almost doubled last year, the fiscal deficit is over 7 per cent of gross domestic product and interest rates are well over 20 per cent – offers the banks easy profits Banker versus banker from trading in almost risk-free government paper, with wide spreads Central Bank Governor Sanusi wants to tame on short-term loans. Customers pay stiff (some say extortionate) fees. his former banking colleagues The biggest profits, especially for smaller banks, come from illegal currency dealing. The official exchange rate is now 119 naira per US Nigeria’s banks are dynamic, indigenous and very profitable. Their dollar, the parallel market rate N137 per dollar. As that gap increased attitude to financial regulation is another story. Some of the country’s over the past three years, so did the temptation of ‘round-tripping’: biggest financial egos are now at war with the Central Bank of Nigeria buying forex at the official rate and selling at the higher parallel rate. (CBN), which is trying to bring them to heel without a major banking Round-tripping involves raising cheap ‘official’ dollars from the CBN crisis (AC Vol 43 No 5). with the help of false import documents, then selling the fraudulent A confidential study by the International Monetary Fund this year dollars on the parallel market at premiums of 17-plus per cent. Bankers estimated that about half of Nigeria’s 100 banks were insolvent or reckon that half of all foreign currency transactions take place on the close to it and should be shut. The top 40 or so should survive but CBN parallel market, either in cash through bureaux de change and currency Governor Joseph Sanusi has taken on his former colleagues; he was dealers or in offshore bank transfers. formerly Managing Director of First Bank of Nigeria. Relations have By providing dollars without valid import licences, the banks foster soured fast. Bankers lambasted the CBN for closing Savannah Bank corruption in the ports and civil service. CBN officials say they want in February without following legal procedures. In April, the CBN banks to stop dealing in the informal and unregulated economy but that, suspended 16 others from the foreign exchange market after an unfortunately, means most of the economy. Obasanjo’s government investigation established that most of their profits were made by berates Western governments for not handing back state funds stolen by flouting currency regulations. A further 55 banks are said to be under former military leader General Sani Abacha and laundered through investigation for exchange infringements. Western banks such as Citicorp (AC Vol 43 No 9). Yet it has tolerated Top bankers broke with protocol at a meeting a few weeks ago and local money launderers, most of whose offences are prompted by loudly booed Sanusi when he harangued them. He wants to stop illegal government restrictions. currency trading, which he believes feeds unregulated, undocumented, Benchmark interest rates in the interbank market are some 27 per untaxed ‘informal’ trade, encouraging smuggling and the bribing of cent; inflation is close to 20 per cent. Since the army left power in 1999, customs officers. President Olusegun Obasanjo backs his ‘crusade the naira has depreciated by more than 40 per cent. This cripples to cleanse the banking system’. They have chosen a popular target. productive investment but is news for banks. Balance sheets have Nigerians tend to dislike bankers, seeing them as profiteers at the doubled every three years, in line with money supply growth. The expense of the economy and the value of the naira. Some foreign government wants the banks to make longer-term, lower-interest loans. bankers, though, enviously admire their resourceful and innovative ‘The economic climate makes this impossible to all but a handful,’ says Nigerian counterparts. one senior Lagos banker. Some winners and losers Union Bank, First Bank and United Bank for Africa control over a third of former petroleum advisor Yahaya Dikko and corporate Wunderkind, won the sector. Mid-level banks range from stars to the technically insolvent. control in the mid-1990s by coordinating blocks of shares allocated to Small banks often survive and even thrive by foreign currency deals and Nigeria’s states during a government sell-off – and clashing with General high-risk loans to importers. All spend fortunes on the abilities and Sani Abacha’s regime. His father, Professor Tiamiyu Bello-Osagie, was connections of their chief executives. gynaecologist to several Nigerian first ladies. UBA’s new MD is Arnold Ekpe. ● First City Monument Bank: created in 1983 by Otunba Subomi ● FSB International: quiet executive Mohammed Hayatudeen orchestrated Balogun, a politically active, influential Yoruba banker who pioneered the a management takeover when the government sold residual shares in 2000. new generation of banks. Last year the Central Bank of Nigeria tried to force He is an Arab Choa from the north and may have political ambitions. his resignation over foreign exchange deals but he won a court battle. Proud ● IBTC: Atedo Peterside, suave Managing Director and weekend polo and flamboyant, he is expected to hand over to second son, Ladi Balogun. player, backs liberalisation and abolition of currency controls, and is tipped ● Diamond Bank: Pascal Dozie, Chairman, has wide financial interests; he as a future finance minister. Alongside FCMB, his bank has won lucrative is Igbo and does much of his business in the south-east. Diamond was one privatisation consultancies. of the first to introduce automated banking; penalised in April (with 15 ● Zenith International Bank: has become fourth most profitable bank under others) for breaking forex rules, it was ordered to refund over US$3 million. Jim Ovia and is now cleaned up after previous forex controversies. ● First Bank of Nigeria: the biggest bank, previously owned 60 per cent by ● Hallmark Bank: Chief Executive Marc Wabara is close to Health Minister Standard Chartered and nationalised in the 1970s under Samuel Asabia. Alphonsus Nwosu. Eyebrows rose when European Union funds worth 20 FBN’s share price fell this year after it forfeited $96 mn., lent to consortium mn. euros ($19 mn.) for a polio eradication campaign landed in in a high IILL to acquire a majority stake in state telephone company Nitel. The loan, interest account at Hallmark. worth two-thirds of the bank’s shareholder funds, broke CBN rules and ● Equatorial Trust Bank: Chairman Mike Adenuga is confidant and Managing Director Bernard Longe was sacked, after reportedly clashing business partner to former dictator Gen. Ibrahim Babangida. with Oba Otudeko, a leading shareholder. FBN may replenish its coffers ● Standard Chartered: one of a handful of foreign banks, now back in Nigeria this year by selling its multi-million-dollar stake in Econet mobile telephones. alongside Citibank. Both did well when CBN punished local banks for ● United Bank for Africa: Chairman Hakeem Bello-Osagie, assistant to breaking forex rules.

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Insiders claim only a few banks including IBTC, Standard Chartered, developing accountable pluralist institutions since the 1990 Franco- Citibank, Stanbic and Guaranty Trust, have observed foreign exchange African summit at La Baule, France, when French President François regulations strictly over the past ten years. Other banks claim the CBN Mitterrand famously told his mainly autocratic audience that fails to distinguish between round-tripping and the more common democracy could be their ‘friend’. deals in ‘free funds’, trading at smaller margins with dollars drawn Yet after more than a decade of multi-party elections, the real from outside the official accounts. They also argue that the CBN question is: whose friend has democracy proved to be in Francophone crackdown has made matters worse, by damaging public confidence Africa? Have elections simply been transformed into a mechanism for and driving the illicit forex business further offshore, where it is often legitimising old dictators and ensuring their continued access to carried on by Nigerian expatriates. foreign aid under today’s tougher conditionality? Or have elections Some banks, hurt by the resulting loss of earnings, have gone in for emerged as a credible mechanism for expressing the popular will and high-risk lending at high rates of interest. Agusto, a Lagos-based allowing people to change their rulers? credit rating agency, reports banks writing off 18 per cent of their net Recent developments in Congo-Brazzaville do not engender interest income to cover loan defaults in 2000. This proportion has optimism. Patently distorted presidential and parliamentary elections, risen every year since 1996 and is approaching 1994 levels, when following an equally questionable constitutional referendum, have financial turmoil forced 31 distressed banks to close. elicited practically no comment from African leaders whose aid pitch to the G-8 summit in Canada on 26-27 June was supposed to be based In denial largely on improved standards of governance. For months, CBN regulators denied that there was systemic distress in With President Jacques Chirac, friend to a string of African the banks. In February, they suddenly shut down Savannah Bank, strongmen, now holding all the reins of power in Paris, it is hard to alleging that accounting irregularities hid huge losses. Savannah’s imagine government victories in impending elections in Togo and majority owner is a maverick Igbo politician, Senator Jim Nwobodo, Cameroon attracting much scrutiny: Yaoundé signalled its implicit and his wife Patricia was a powerful general manager. Other banks contempt for the ballot box by postponing the 23 June legislatives at had long considered it an uncertain creditor but it had many customers a few hours’ notice, saying election materials were not ready. The vote in the east and north. Certainly, the CBN acted faster than the rules was put off for a week and Interior Minister Ferdinand Koungou seem to allow, saying that delay would have given Nwobodo warning Edima was sacked. to withdraw his money. Nwobodo and his eastern Igbo allies implied President Paul Biya fears a similar fate to Cameroon’s first President, that the closure was politically motivated by a Yoruba-run CBN: ‘It Ahmadou Ahidjo, who died in exile. Togo’s President Gnassingbé sent a signal to depositors that if the CBN doesn’t like your bank’s Eyadéma would also need an exit strategy to ensure a retirement free chairman, it can decide to close your bank’. of awkward questions about the circumstances surrounding the killing The general loss of confidence has set deposits flowing from the of Sylvanus Olympio, and his treatment of his opponents while in smaller and newer banks to the older firms and sometimes out of the office. Parliamentary elections have been postponed several times. banking system altogether. The crisis seems to have been sparked by The vote is supposed to replace 1999 polls boycotted by the opposition, the collapse of a sort of pyramid banking scheme based on profitable which says the 1998 presidential election was rigged. In May, the forex dealing. The CBN’s efforts to unravel that network, which used government appointed seven judges to replace the electoral commission, ‘free funds’, showed that some 70 banks were also illicitly sourcing paralysed by fighting between its opposition and government members. foreign exchange from free funds; dealers in those funds, including Sanusi’s First Bank, were once tolerated; now they face heavy sanctions. It’s better in the Sahel Obasanjo has announced that his government will resume formal Francophone Africa’s multi-party electoral experience includes relations with the IMF on 1 October. The Fund says it knows nothing successes as well as failures. A Sahelian or West African political about that and makes the obvious point that foreign exchange scams model may be emerging in contrast to the more authoritarian and could be abolished by merging the official rate with the market rate. violent experience of Central Africa. A string of impressive polls That would drastically cut the income of many smaller banks, causing started with Abdoulaye Wade’s unexpected victory in Senegal in mergers, takeovers and some collapses. For the IMF, that would be a March 2000. Mali saw the election of retired General Amadou step in the right direction, since what Nigeria needs is fewer banks and Toumani Touré (ATT) in May. more regulators. Even Burkina Faso’s 5 May legislative polls may have been a step away from the authoritarian tendencies that had previously characterised FRANCOPHONE WEST AFRICA the régime of of President Blaise Compaoré. His ruling Congrès pour la Démocratie et le Progrès (CDP), which previously had 107 of 111 seats, has been reduced to 57 seats, against 54 for the opposition, under a split local/national voting system. The voters’ friend Sankarist opposition parties were among the beneficiaries with the After a decade of democratisation, some Union pour la Renaissance/Mouvement Sankariste under Bénéwende elections are bringing change, some are not Sankara, gaining three seats and promising robust opposition to the CDP in the Assemblée des Députés du Peuple. Herman Yaméogo’s France’s electoral downs and ups over the past few months have Alliance pour la Démocratie et la Fédération-Rassemblement provoked some sardonic comment in the Francophone African press Démocratique Africain (ADF-RDA), with 17 members of parliament, – especially when extreme right-wing Front National leader Jean- has outstripped the Parti pour la Démocratie et le Progrès of historian Marie le Pen edged the incumbent Socialist Premier Lionel Jospin and veteran politician Joseph Ki-Zerbo. out of the presidential contest in the 21 April first round. Oppositionists say Compaoré has staged a tactical retreat, telling Delight at French discomfiture was understandable in former colonies the CDP’s regional barons not to campaign too hard in opposition such as Mali and Senegal. They have made impressive progress in strongholds, while attempting to rise above politics like his recently

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many sections of the ruling Rassemblement Démocratique du Peuple Inside the tent Camerounais and his election commission is anything but independent. Stability rather than electoral transparency is likely to be top priority Virtually everywhere, voters now expect to be paid to cast their for Pierre-André Wiltzer who, contrary to expectations in some ballot, an attitude most deeply rooted in Benin, where the region’s Africanist circles, has been named France’s new Secretary of State moves towards democratisation are often deemed to have begun. (junior minister) for Cooperation and Francophonie (AC Vol 43 No There, corruption has always been a particularly serious problem but 12). Given Foreign Minister Dominique de Villepin’s personal elsewhere, apathy is the main issue: a decade of supposed interest in African affairs, Wiltzer will not be doing much policy democratisation in countries such as Togo and Chad has left a making of his own. Since 1986, he has been député for Longjumeau, dangerously disillusioned young urban electorate. just south of Paris, for the Union pour la Démocratie Française. Like In Bamako, Islamist lobbying was heavier than normal; Konaré and many other UDF members of parliament, he broke with party leader former Premier Mandé Sidibé have expressed alarm at the tone of François Bayrou to enter President Jacques Chirac’s ‘big tent’, the Friday preaching in some of the city’s most prominent mosques and Union pour la Majorité Présidentielle, in the run-up to this month’s the tiny, mostly transient, Pakistani community, many of whom are legislative elections. He is thought to have been close to De Villepin on their way to Europe, remains under close police surveillance. for years but is very much a product of the pro-European centre-right In Niger, disillusion with electoral politics has spread since the rather than Chirac’s nationalist neo-Gaullism. election in December 1999 of President Mamadou Tandja. Local Wiltzer should be familiar with the issues and have an interesting critics blame squabbling politicians but Islamists blame voter-based address book. He served on parliament’s defence committee during the democracy itself. Even the relatively moderate Cheick Oumarou 1990s slim-down of France’s military role in Africa and the development Ismael of the Association Islamique du Niger has made barbed of its Recamp peacekeeping support initiative, and he has chaired the remarks. US intelligence specialists are keeping an eye on rising political committee of the Assemblée Parlementaire de la Francophonie. Islamist rhetoric. For over a decade he dealt with coopération and Francophonie in the UDF and before that, as a career civil servant in the 1980s, was chef de Back in Abidjan cabinet to centrist Premier Raymond Barre. Côte d’Ivoire’s next electoral test, on its road back from near- Wiltzer may take more interest in human rights than some African implosion in 1999-2000, is local council elections on 7 July (AC Vol governments would like. In the National Assembly he was active in 43 No 10). Former Prime Minister Alassane Dramane Ouattara’s raising the issue of Chinese persecution of the Falun Gong sect. Rassemblement des Républicains (RDR) is expected to sweep the largely Muslim north and a strong showing for the party, the only one retired Malian counterpart, Alpha Oumar Konaré. Compaoré is still putting up candidate lists in all the country’s 58 départements, is likely recovering from the exposure of official efforts to cover up the to encourage a new wave of opposition militancy. An RDR march in December 1998 killing of journalist Norbert Zongo and is vulnerable Abidjan is planned for 9 July to demand nationality papers for ‘ADO’, to criticism for his support for Liberian hard man Charles Taylor. who is still accused by his increasingly xenophobic opponents of not French radicals still regard Paris and La Francophonie as a force for being a true Ivorian. ill: they claim that hardline dinosaurs such as Gabon’s Omar Bongo Underlying cultural and historical factors remain crucial. Benin’s and Cameroon’s Biya have received coaching via French embassies in history of serial coups and military-Marxist rule was relatively peaceful: rigging techniques and how to terrorise opponents into quiescence. losing power has never necessarily been fatal and the constitutional Francophone election observer missions, made up of the great and the court is seen as non-partisan and authoritative. No coincidence, then, good of conservative ‘Françafrique’, are often despised by politically that since 1990 rulers have twice gracefully accepted electoral defeat. minded locals in Lomé, Brazzaville and Ndjamena, as rubber stamps Senegalese democracy now seems among the most deeply embedded for tin-pot dictators. in Francophone Africa, thanks to underlying institutional and social Other international missions have done little better in recent years, strengths and a sense of belief in legal order built up over decades. though those from the United States’ Carter Center have occasionally Vigilant free media and a strong culture of polling station procedure spoken their mind. The future of election observation is regional and have limited the scope for rigging. Not so in Chad, where one local, say specialists in organisations such as the West African Groupe preferred rigging technique is to inflate voter lists of expatriate d’Etude et de Recherche sur la Démocratie et le Développement en Chadians in neighbouring Sudan. Afrique (GERDDES-Afrique) and Senegalese human rights body There has never been any doubt about the victor in this year’s Rencontre Africaine pour la Défense des Droits de l’Homme. European Congolese presidential and parliamentary elections – President Denis Union officials are increasingly keen on funding local observers Sassou-Nguesso and his Parti Congolais du Travail (AC Vol 43 No through the development budget, rather than sending out expensive 12). In January’s referendum on a new constitution, many people in and widely derided ‘electoral tourists’. In many countries, local the southern Niari, Bouenza and Lékoumou regions – the heartland of observers, often former law students, now have a decade’s experience support for exiled former President Pascal Lissouba – were excluded of electoral best practice. The US State Department-backed from the electoral roll; large numbers of foreign residents, with good International Foundation for Electoral Systems has concentrated on reason not to vote against Sassou, were included. skill-building at national level in recent years. African observers feel In the first round of the parliamentary elections on 26 May, a host they have made rigging more difficult in all but the worst cases. of candidates who appeared set for victory over PCT rivals suddenly Turnout remains a key variable even in credible polls. Burkina saw found themselves accused of various electoral abuses and debarred, 64 per cent participation but on a suspiciously low 2.9 million voter most prominently Finance Minister Mathias Dzon. The constitution electoral register, while in Mali, ATT was elected on barely half that that excluded Lissouba and former Prime Minister Bernard Kolélas, share of the electorate. Elections all over the CFA Franc Zone have Sassou-Nguesso’s most credible opponents, from contesting the 10 been accompanied by often justified complaints that the electoral lists March presidential election was drafted with the help of French are tampered with well before campaigns begin. Biya has purged consultants, all with close links to Chirac.

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gone quiet but Semere Kidane, a student leader at Asmara University, ERITREA remains in gaol without charge in a secret place. Students disappear across the border or fail to return from studies abroad. This exacerbates the shortage of skilled, educated staff for government and the anaemic private sector. The homeward flow of Independence-war refugees Disarmed but not demobbed from Sudan has slowed or reversed, as reports filter back of the Asmara People grow poorer and less free but the government’s repressive attitudes and the threat of national service. regime stands by its guns The wives of two former liberation leaders have been arrested and held incommunicado since September, after their children sought to Despite sanctions by the European Union and other donors for bad avoid national service. Ten gaoled journalists were moved out of governance, harsh treatment of political prisoners and tight controls police stations in Asmara and separated from one another after they on the press, President Issayas Aferworki shows no sign of yielding. announced a hunger strike in March; their whereabouts are unknown. Aid cuts harm his people but he takes a hard line, preparing for tightly Government prison camps for military detainees are in the Ala Valley controlled elections in 2003 and five more years in power. Before east of Asmara and in Abi Adi, west of Mendefera. Ethiopian those elections there will be a congress of the ruling People’s Front for prisoners of war are held at a remote rural site north of Nakfa. Democracy and Justice and a party reshuffle to reflect his preferences. The aid foregone since last September, when Issayas cracked down Closing the churches on all public dissent and closed the private press, may be as much as The government has shut down what it calls the ‘new churches’ – those US$400 million. Development funding from Western donors and outside the Eritrean Orthodox, Roman Catholic and Evangelical international non-governmental organisations has been suspended or Lutheran. These include the Seventh Day Adventist and Pentecostal cancelled. Most assistance reaching Eritrea today is for emergency sects and the Jehovah’s Witnesses. The orders came from Information relief or specific post-war recovery programmes such as demobilisation Minister Naizghi Keflu, a nationalist veteran of the 1950s and ’60s of combatants from the border war with Ethiopia (AC Vol 43 Nos 8 and old confidant of Issayas in the Eritrean People’s Liberation Front. & 11). This year, though, Issayas is ordering wartime conscripts to He was cast as enforcer in September 2001, when Issayas purged his stay in uniform and work two extra years on low pay to cover the former comrades. In the 1970s, Keflu headed the EPLF’s much feared growing government deficit. Donors may withhold the money they Halowa Sawra (Guardians of the Revolution), which dealt both with had pledged for demobilisation. the party’s political dissidents and with military offenders, and ran a In the past, Eritreans abroad patriotically raised hard currency for the secret prison near Issayas’ headquarters at Hishkub. government and often went home, bearing cash, for the holidays. This The EPLF Politburo member to whom Keflu then reported was year, the diaspora is riven by quarrels. One charity in the United Petros Solomon, imprisoned on 18 September last with ten of his States, the Eritrean Development Foundation, collapsed earlier this former comrades on unspecified charges, in the first political crackdown. year and has sent almost nothing since its board resigned over political Keflu’s first act as Information Minister was to close down the private developments inside Eritrea. press; he has since shut down an Asmara printing press for publishing In the towns, economic failure is accompanied by price increases in an offensive map just before the 24 May Independence day celebrations basic goods of up to 20 per cent this year: this helps to account for the and delayed or blocked the publication of books, journals and magazines. widespread discontent. The government tried to stem inflation by He was apparently annoyed that his name did not appear in a history price controls, imposed in May, on grain, meat and food. This will of the Eritrean Independence movement in the 1950s. further impoverish farmers, suffering from the war and from labour As urban discontent grows, Eritrean Islamic Jihad is increasing its shortages; most conscripts come from farming families. activity in the Gash-Barka and Northern Red Sea zones, whose people Last year, Issayas raised funds from the World Bank, United Nations are turning against the PFDJ regime and in favour of the Sudan-based Development Programme and US Agency for International opposition. In these frontier districts, there is resentment of the losses Development by outlining a disarmament and demobilisation suffered in May-June 2000, when Eritrean forces were driven back programme. Last month, he ordered those on national service to serve from the border. There is also anger at what is seen as colonisation of two more years on reconstruction projects and in short-staffed the lowlands by Highland Tigrinya-speakers. Many Lowlanders resist government departments. The new programme is called ‘Warsai national service, especially for their daughters, and many former Yikealo’, combining the word for young conscripts with the nickname refugees, brought home from Sudan in large numbers under United for veterans of the 30-year independence war. In 1993-95, a similar Nations’ auspices last year, have been drawn to Islamist politics. decision to extend for two years the largely unpaid status of liberation Eritrean Defence Forces’ units check roads in the northern Sahel war veterans nearly provoked a rebellion. Surprised by the region daily for land mines and potential ambushes. Many say the announcement, army units rolled heavy artillery into Asmara and mines are supplied by the National Islamic Front government and demanded to see Issayas. He met them in the football stadium and smuggled back by returnees from Sudan. Last month, two EDF calmed them down with promises of extra benefits for families and brigades were deployed along the border to catch infiltrators. Former assurances that political leaders would bear the same burden. Eritrean Liberation Front factions in the Alliance of Eritrean National Today the army is led not by unpaid revolutionaries but by salaried Forces, backed by Ethiopia, are active in the Kunama area along officers – asking the young people to do as they did a decade earlier. Eritrea’s western border with Sudan and in the southwestern corner of The army won the Independence struggle but the war with Ethiopia Gash-Barka on the border with Ethiopia. ended with devastating losses (officially 19,000) and a truce which The Addis government is moving Ethiopian families into the Badme placed thousands of foreign peacekeepers on Eritrean soil. area, where the conflict escalated into war in May 1998 and which both Many young people who cannot prove they have completed their governments still claim after an ambiguous ruling by the International national service flee to Djibouti or Sudan. No exit visas are available. Boundary Commission. This could lay the groundwork of a future Last summer’s big protests against national service conditions have conflict, as the proxy war continues by other means.

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Dhlakama again in 2004. MOZAMBIQUE The position of Raul Domingos, once one of Renamo’s brightest leaders, will be interesting. Ten years ago, he led Renamo’s negotiators in Rome, sitting across the table from Guebuza – then went into business with him. Last year, Dhlakama expelled him from Renamo as a potential Seconds out rival for the party leadership. Domingos might be offered a place in a Corruption is the issue for the ruling party’s Guebuza government – and might be persuaded to stand as an independent new presidential candidate in 2004, to draw votes away from Dhlakama. Frelimo local organisers outside Maputo reported that Chissano’s poor The suspense is over. Frelimo, the ruling party once known as the Frente showing in 1999 was partly because people were complaining about de Libertação de Moçambique, has named Armando Guebuza as its corruption by party and government officials. The President’s image was Secretary General and presidential candidate for the 2004 election (AC further damaged by two murders; of newspaper editor Carlos Cardoso in Vol 43 No 4). Political veteran ‘Guebas’ was strongly opposed by his old 2000 (AC Vol 42 No 25) and banking supervision chief Siba-Siba opponent, the increasingly lame-duck President Joaquim Chissano, who Macuacua in 2002. It is widely believed that neither killing was properly announced last year that he would not stand again as national president but investigated and Maputo’s rumour mill persists in linking the fact that both would hold on to the party leadership. the victims were investigating a US$400 million bank scandal in which Chissano’s authority has been eroded by his drab performance of recent senior government figures were said to be involved. years and the explosive growth of corruption among people close to the Guebuza’s main business interests are in transport, of which he was presidency. Guebuza pulled together a diverse group of backers. Minister in 1987-94. The Chissano-Guebuza rivalry has deep roots and Unsurprisingly, his campaign was led by Frelimo’s old guard. Surprisingly, when public businesses were privatised each seems to have specialised, it was led by Graça Machel, widow of President Samora Machel (and with Guebuza and his allies controlling transport and Chissano and his now married to South African ex-President Nelson Mandela), and by allies moving into banking. Guebuza is now seen as having passed Jorge Rebelo. Both are widely respected for retaining Machel’s through what in his Marxist days he he would have called ‘the period of revolutionary standards of probity. Guebuza’s other backers include primitive accumulation’ and may well now wish to again move with the senior army officers, the highly politicised group of former combatants times. That could mean attempting to end corruption in the legal system and those promoting black empowerment. Guebuza was elected, along and the police which have been fostered by some presidential supporters. with a new 15-member Political Committee and 160-member Central In his closing speech to the party congress, Guebuza caused some Committee, at Frelimo’s Eighth Congress in the first fortnight of June. surprise by vehemently promising to fight ‘all forms of corruption’. In an equally unexpected passage, he went out of his way to support freedom of Old guard moves with the times the press. This was interpreted as an attack on the presidential son, Chissano had hoped to promote a new generation of candidates, all under Nhimpine Chissano, who is pursuing a complex and, unusually, criminal, 50. However, Frelimo’s old guard kept its grip. Guebuza is their strongest defamation case against journalist Marcelo Mosse. If Chissano Junior possible candidate and will be an effective campaigner. At 59, he’s just won his case, one effect would be to bankrupt the murdered Cardoso’s three years younger than the President and was a senior party man in the small children, who inherited his newspaper, Metical. The prosecution 1962-74 liberation war. The only new-generation faces on the new has triggered international condemnation. Political Committee are Transport Minister Tomás Salomão (48), whom Frelimo thinks of itself as a broad front. In 30 years, it has never split donors approved of in his former post as Finance Minister, and José and its leaders strive to keep the party together at almost any cost. Pacheco (44), the respected Governor of Cabo Delgado Province. Whatever his distaste for some of Chissano’s cronies, Guebuza will want Guebas is Ronga, from an ethnic group based in the far south around to keep the skeletons (including some of his own) locked in the cupboard. Maputo, but was born in Nampula Province in the north. He’s the first Pressure from donors and some party members may lead to a few Frelimo leader not to be from the southern Shangaan group. As a party prosecutions. Yet the main message from Guebuza is likely to be ‘get your official for 35 years, he acquired a reputation for intelligence, and as hand out of the till and keep your head down’. political commissar of the army in 1977-83, he was one of the few with a serious understanding of Marxism-Leninism. In the late 1980s, he moved Correction AC Vol 43 No 12 – Somalia: Colonel Hassan Hirale, with the times and became one of the first to turn to capitalism. No law not Barile, leads the Juba Valley Alliance. Apologies. prevents government officials mixing politics with business; he prospered. In politics, he was often handed hard, confrontational, jobs. He was Visit our website at: www.africa-confidential.com Interior Minister in the 1974-75 transitional government which shared Published fortnightly (25 issues per year) by Africa Confidential, at power with the departing Portuguese colonial regime. Then 15 years 73 Farringdon Road, London EC1M 3JQ, England. later, he headed the government negotiating team at the 1990-92 Rome Tel: +44 20-7831 3511. Fax: +44 20-7831 6778. Copyright reserved. Editor: Patrick Smith. Deputy Editors: Gillian Lusk talks which ended the war with the Resistência Nacional Moçambicana and Thalia Griffiths. Administration: Clare Tauben and Juliet Amissah. (now known only as Renamo), which had become the political opposition after years as a terrorist outfit backed by South Africa’s apartheid regime. Annual subscriptions including postage, cheques payable to Africa As Governor of the difficult central province of Sofala (1981-83), he Confidential in advance: Institutions: Africa £312 – UK/Europe £347 – USA $874 – ROW £452 earned a reputation for extreme harshness. When he became Interior Corporates: Africa £404 – UK/Europe £425 – USA $985 – ROW £531 Minister again in 1983, he was responsible for Operation Production, Students (with proof): Africa/UK/Europe/ROW £87 or USA $125 when thousands of people in Maputo without documents were shipped to All prices may be paid in equivalent convertible currency. We accept remote districts without due process. American Express, Diner’s Club, Mastercard and Visa credit cards. Subscription enquiries to: Africa Confidential, PO Box 805, Oxford OX4 In the 1999 presidential poll, Chissano beat Renamo’s Afonso 1FH England. Tel: 44 (0)1865 244083 and Fax: 44 (0)1865 381381 Dhlakama by a whisker. International observers rejected Dhlakama’s Printed in England by Duncan Print and Packaging Ltd, Herts, UK. claims of fraud but it was widely felt that Chissano would not beat ISSN 0044-6483

7 28 June 2002 Africa Confidential Vol 43 No 13

reporters must pay a whacking Z$500,000 Even the signatories are having difficulty Pointers (US$8,000) to register. Foreign hacks are barred drafting a transitional constitution. They disagree from long-term residence. March’s Access to over the respective powers of Kabila as transitional Information and Protection of Privacy Act President and of his designated Prime Minister, GHANA prescribes heavy fines and two-year gaol terms Jean-Pierre Bemba, who says he will come to for ‘abuse of journalistic privilege’. First to be Kinshasa only if he can bring 1,500 of his men. tried is London Guardian Zimbabwe veteran Kabila can now hand out a peace dividend. But Of rice and rings Andrew Meldrum; eleven other colleagues were if his government drags its feet, it could antagonise arrested: some are detained. its new allies in Bemba’s Mouvement de Libération An interesting footnote to tales of corruption All this made Mugabe’s visit to Rome for a UN du Congo. As long as the RCD-Goma is not part during the reign of President Jerry Rawlings is Food and Agricultural Organisation conference of a deal, more conflict remains a possibility. offered by the case of Juliet Cotton, convicted on on 10-14 June look even odder. The European 17 June by a federal jury in Atlanta, United Union has a travel ban on Mugabe but, officials SENEGAL States, of colluding with members of Rawlings’s explained, visiting the UN in Italy does not government to dupe Ghana of over US$20 million constitute visiting Italy. EU Spokesperson (AC Vol 42 No 8). Cotton, 38, an African American Gunnar Wiegand described the trip as Wage inflation from Duluth, Georgia, was found guilty of 35 ‘distasteful’. Other sources said Mugabe spent no counts of bank fraud. time at the summit. Senegal’s 1-0 quarter-final defeat by Turkey this In 1996, she set up a firm called Quality Grains, ‘I am uncomfortable when any head of state week means that an African soccer team has not ostensibly to grow rice in Ghana and help end that is tyrannical and predatory comes to a yet reached a World Cup semi-final (Cameroon dependence on imports. She obtained over $18 conference like this and he [Mugabe] fits that lost a 1990 quarter-final to England). Still, much mn. in loans in the USA, guaranteed by the Accra category,’ declared US Agency for International of the world rejoiced with President Abdoulaye government, but used the money mainly to finance Development chief Andrew Natsios. ‘He is Wade that Senegal had ‘entered the era of the a luxurious lifestyle. Former Finance Minister causing the crisis in Zimbabwe.’ Senegal that wins, in the ballot boxes and on the Kwame Peprah and five other officials are on Even louder was the protest of British human sports field.’ trial in Accra for their part in the scam. rights activist Peter Tatchell, who has made It was a remarkable first-time performance for Assistant US Attorney Richard Langway told several attempts at a citizen’s arrest of Mugabe. a team that had not even got an official kit supplier the court Cotton had spent $9.5 mn. of the loans on With the MDC’s EU representative Grace before the World Cup draw. Africa’s more herself, including buying a $1.1 mn. home and Kwinjeh, he descended on Harare’s Rome experienced stars, Cameroon, Nigeria, South spending $500,000 on a Rolls Royce, a Bentley, a Embassy in the early hours of 13 June hoping to Africa and Tunisia, all fell at the first hurdle, with Jaguar and two Mercedes cars. She once walked wake Mugabe, who had left his hotel for the safety only Bafana Bafana making real waves, narrowly into a SouthTrust bank branch in Atlanta and of the mission, with shouts of: ‘You can run but missing a place in the last 16. withdrew $200,000 in cash, drove to the city’s you cannot hide... One day you will be arrested Off the pitch, Cameroonian ex-Minister Issa Phipps Plaza and spent $65,000 at Tiffany’s on and put on trial, just like Slobodan Milosevic’. Hayatou lost out to beleaguered Fédération jewellery, including $46,000 on a diamond Internationale de Football Association President wedding ring. The next day, she gave $10,000 in WORLD BANK/DRC Sepp Blatter in the battle to control world football. cash to the leader of a 50-piece band that played at Twenty-one of French-born ’s her wedding. 23-man squad played in France, many in near Two days later, she handed over $30,000 in cash Carrots for Kinshasa obscurity, before sending les Bleus packing in the to a travel agent for a Caribbean honeymoon and The International Monetary Fund and World Cup’s opening match. For several Lions de plane tickets for her wedding guests. She will be Bank’s US$1.2 billion package is a massive gesture Teranga, the prospect of serious wage inflation sentenced on 29 August. of political support for President Joseph Kabila. beckons. The superstar of Senegalese football, Technically it was made possible by a relatively self-styled ‘Serial Killer’ , is ZIMBABWE successful IMF staff-monitored programme, which moving from Lens to England’s big-budget saw the introduction of a floating exchange rate Premiership team Liverpool, for £10 million system to break the cycle of hyperinflation and (US$15 mn.); he could also have gone to Italy – Fame and famine currency depreciation, while Congo-K cleared its Juventus and Roma were interested. Liverpool’s Life grows grimmer in Zimbabwe. President $522 million arrears to the Fund thanks to bridging French Manager, Gérard Houllier, knows Metsu, Robert Mugabe’s 24 June order to 2,900 white loans from South Africa, Belgium, France and and has also bought Salif Diao for £5 mn. commercial farmers to abandon their farms, in Sweden. Manchester United’s Sir Alex Ferguson is said mid-growing season, gives new urgency to United Politically, it seems IMF Managing Director to have approached another Lens player, Papa Nations World Food Programme warnings that Horst Köhler has dropped demands for the Bouba Diop, to replace unhappy Argentine some six million people face starvation (AC Vol laborious Inter-Congolese dialogue to succeed as midfielder Juan Sebastian Veron. Lions Captain 43 No 11). Local human rights groups note that if a precondition for funding. On 12 June, the IMF Aliou Cissé is expected to join Premiership land-owners comply (and many say they won’t), approved $750 mn. over three years under its newcomers Birmingham City while Scottish giant over 100,000 farm workers will lose food, home Poverty Reduction and Growth Facility. This Rangers is among those eyeing striker Henri and job. Some Zimbabwe African National Union- triggered World Bank approval the following day Camara. Ironically, much of this action may by- Patriotic Front ministers have reportedly pleaded of a $450 mn. Economic Recovery Credit. pass the best known Senegalese players’ agent, with Mugabe to reconsider. The government’s Though cash won’t be released all at once, the Marseille-based Pape Diouf. His star players, restoration of land to black farmers has been deal may reduce international leverage on Kabila including Chelsea’s Marcel Desailly and William planned but rarely implemented for over 20 years. at a critical time. Congo remains divided; a Gallas, are French. On 16 June, more than 50 protesting Movement power-sharing agreement reached in April in Sun A diplomatic stopover in Taiwan on the way for Democratic Change (MDC) supporters in City, South Africa, leaves out both the Rwandan- home turned into a fiasco when the exhausted Harare and Bulawayo were arrested and beaten. backed Rassemblement Congolais pour la Lions complained about their treatment and The same day, ZANU-PF tried to pre-empt Démocratie-Goma, which controls perhaps one- declined to play an exhibition game. Senegal is reporting of the multiplying crises by imposing third of the country, and Etienne Tshisekedi’s one of few countries still to recognise Taiwan stinging fees on journalists. All media must give Union pour la Démocratie et le Progrès Social rather than China and President Chen Shui-bian government details of their finances. Local (AC Vol 43 No 10). is due to visit at the end of June. 8