www.africa-confidential.com 3 March 2000 Vol 41 No 5 AFRICA CONFIDENTIAL SOUTH AFRICA 3 Betting on the market Income taxes and the budget deficit In God's name are down and defence spending is The agitation for Islamic law is as much political and ethnic as it is up. That conservative combination religious; its proponents have weakened and divided the North in Finance Minister Manuel's budget on 23 February won The government appears to have negotiated a respite in its latest crisis. On 29 February the governors of five widespread plaudits. Two days northern states said they would stop plans to enforce Sharia (Islamic law). Vice-President Atiku Abubakar later, the USA's most conservative led negotiations with the governors and persuaded them to back down - at least for now. Among the political ratings agency, Standard & Poor's, weapons at his disposal was cutting finance to those state governments which ignored central government on raised South Africa's rating to the issue. Yet the Northern establishment is split over Sharia. Many of the older more pragmatic generation investment grade. of Northern leaders see it dividing and weakening the region and would welcome Abubakar’s move to stop it. Yet a younger generation of Northern politicians, several of whom owe their rise to military rule over the past ANGOLA 4 two decades, believe that Sharia is an important political and cultural tool for the North to fight against Southern domination. Cleaning diamonds The Sharia crisis is much more than a quarrel between elites, though. The campaign for Sharia now enjoys The government claims that its mass support in the North. A demonstration in its favour in Zamfara State last October drew several hundred latest shake-up in the diamond thousand supporters from other Northern states. Campaigners have again shown their ability to gets tens of sector - it has cancelled or thousands of supporters onto the street in recent weeks. Once Sharia is instituted, it is difficult for Muslims suspended all existing marketing to suspend it without appearing to act against God. contracts - will greatly increase its tax take. The measures are also The response by President Olusegun Obasanjo, a born-again Christian, and Vice-President Abubakar, a Sunni designed to convince the IMF that Muslim opposed to the Sharia plans, has been inadequate. Although the issue has been brewing since Zamfara it's serious about stopping introduced Sharia last October, the Obasanjo government trod too carefully: consumed by unrest in the Niger Delta corruption. and the growing militancy of the O’odua People’s Congress (OPC) in the South-West, the government was reluctant to state its position on Sharia or refer the matter to the courts for a constitutional judgment. Some lawyers contend that SENEGAL 5 Zamfara is in breach of federal law by using federal funds to finance the setting up ofSharia courts which contravene Nigeria’s secular constitution. The issue festered for almost four months. Then more than 400 people were killed in Passion for change Christian-Muslim clashes in Kaduna in the week ending 26 February and in related fighting in the South-Eastern towns of Aba and Umuahia before Abubakar could convene a meeting of the Northern governors to find a way out. For the first time President Abdou Diouf faces a second round in the presidential poll. His chances of Sharia wins kudos winning are much slimmer now The amiable Abubakar has inherited the Northern political network of the late military politician, General most of his opponents have rallied Shehu Musa Yar’Adua, and has for now got the governors’ cooperation. But at what price and for how long? behind the leading oppositionist, Abdoulaye Wade, the veteran Most of all, Sharia wins political kudos for those Northern governors without an effective or popular leader of the Parti Démocratique programme. It may also be part of a campaign by some Northerners to resist what they see as Obasanjo’s pro- Sénégalais. Southern government. A form of Sharia was in force in the North from the days of the Caliphate until Independence. Under indirect rule, Britain banned specific punishments such as amputations and stonings. 6 The first Premier of the Northern region, the Sardauna of Sokoto Ahmadu Bello, reviewed the legal system and introduced a penal code for the North which is largely based on Sharia precepts but again rules out Offshore turbulence amputations and stonings. Ahmadu Bello’s formula provided a workable consensus for both the majority Muslims and minority Christians in the North. The Governor of Zamfara State, Ahmed Sani, has broken that After months of threats, President consensus by introducing full Sharia. has announced that he won't run for a third five-year Sani offered public assurances that the Sharia criminal code, like the civil code, would apply only to Muslims. Yet term in office. But the Salmin era he has since suggested that Islamic law might have to apply to everyone ‘in terms of crimes against the state’. In early may have fatally damaged the February, a Muslim man was flogged for having premarital sex and his girlfriend is due to face the same fate. Another ruling CCM's electoral chances on man who runs a motorbike taxi service was prosecuted for giving a woman a lift on his pillion. the the islands. Governor Sani’s move was approved by many Northerners, frustrated by growing crime and official corruption. The governors of Kaduna and Kano agreed to examine the issue; pro-Sharia Kaduna Muslims POINTERS 8 demonstrated in favour; Kaduna Christians reacted by marching under the slogan: ‘Sharia is not Y2K compliant’. Violence broke out during the Christian demonstration and there was an attack, apparently by some Mozambique, USA/ of their associates, on the Governor’s office. Undeterred by the violence in Kaduna, the governors of Sokoto Africa & Zimbabwe and Niger signed laws establishing the Sharia criminal code in their states too, and Kano and Yobe are considering it. Killer floods; quarrelsome lobby; and running on empty. The proponents of Sharia claim to defend the heart of Northern identity. Yet the idea of solidarity - ‘one North, one people, one destiny’ - promoted by Northern leaders has been ripped apart by the spectacle of northern Christians and 3 March 2000 Africa Confidential Vol 41 No 5

Muslims killing each other. In the past, Northern political leaders tended to play over patronage to grow violent in towns such as Zangon-Kataf, reviving ancient down religious differences, to preserve Northern solidarity in the face of the ethnic and religious disputes. Cosmopolitan Kaduna attracted dissidents. richer, better educated South. Northern religious leaders, especially Muslims, Islamic proselytisers and their Christian fundamentalist counterparts eroded have preached tolerance because, as beneficiaries of patronage from a secular the city’s tolerance, recruiting followers through state radio and television, and state, they would be the first targets of a religious insurgency. They also foresaw bombarding newspapers with Christian and Islamic tracts. intra-Islamic conflicts, between the majority Sunni and minority Shia, and The Northern barons may be waking up to the new explosiveness of the among Sunni sub-groups, such as the Tijjaniya, Qadriya and the puritanical Yan Sharia issue, especially since the Kaduna street mobs moved close to their Izala sect. luxury homes in the city’s leafy avenues. They know that resistance to Sharia by Christian officers from the Middle Belt and the North would further weaken Sani and his Sharia allies Northern control of the military, already damaged by the breakdown of the In the more stable 1980s, there was much ambivalence about figures such as the command structure under Abacha. There are some signs of organised late Sheikh Abubakar Gumi and his Saudi Arabian-financed Yan Izala sect. resistance from moderate Northerners and Middle-Belters, such as the United Northerners recall the Maitatsine riots in Kano in the early 1980s, when naïve Democratic Forum set up by Suleman Takuma, a Nupe from Niger State, who politicians and business people promoted Mohammed Marwa, a charlatan opposes both the APC and Sharia. from Cameroon, whose bloody uprising was put down at the cost of more than Beneath the religious divide lie gaps between Nigeria’s more than 200 5,000 lives by troops commanded by Major Halilu Akilu, later President language groups. Cutting across religious affiliation is ethnic identity: not just ’s security chief. between the the three biggest ethnic groups, Igbo, Hausa and Yoruba, but The House of Assembly in Kano, an almost totally Muslim state, has voted between the many sub-groups among the 20 million Yoruba or between the in favour of Sharia although the State Governor is less keen. Older Kanoites separate but related Ijaw peoples scattered across the Niger Delta. Regionalism remember the Maitatsine horrors, younger voices are less cautious. After the is based on the groups which dominate the regions: Hausa-Fulani in the North, proposal for Sharia was presented to the Kano State Assembly, different Yoruba in the West, Igbo in the east. At Independence in 1960, the regions were factions went off to Libya, Sudan, Saudi and other Islamic countries for fund- the main political units, exercising power over education, health and the budget raising and doctrinal consultations. Ibrahim Zakzaky, a leading Shia with through regional governments and elected assemblies. Many Nigerians, sick strong links to Iran, has denounced the introduction of Sharia within ‘a secular of repeated failures by the central government, hanker for the old pattern of framework’, and seems to be holding out for a Northern Islamic state. devolved power to the regions. In the vanguard of the Sharia campaign are Sani and his allies in Zamfara. Just before the 1966-70 civil war, the regions were replaced by twelve states; He was previously best known as an acolyte of the late military leader, Gen. Sani now there are 36. The aim was to break the power of the regions, seen as Abacha. He won the governorship under the flag of the minority All People’s disruptive of national identity. The main effect was to increase the centre’s Party, which was derided as the Abacha People’s Party and thought to be power over resources and their distribution. When it served their interests, the financed from the Abacha family’s dubious funds. The APP won several states still formed regional blocs to bargain with the centre. The Eastern elite, governorships but most mainstream Northerners joined the People’s Democratic predominantly Igbo and predominantly (Catholic) Christian, has since the civil Party led by Obasanjo and Abubakar; the APP lost credibility by teaming up war tended to strengthen its hand against the Yoruba of the West by alliances with the South-Western Alliance for Democracy to support the failed candidacy with the predominantly Muslim North. On the whole, their ethnic identity of Olu Falae in last year’s presidential election. matters more than their religion. Now the APP is indignant that Obasanjo, seeking to widen the base of his The Western elite is almost equally Muslim and Christian, with a Yoruba government, has included AD stalwarts such as Energy and Power Minister culture and hierarchy more powerful than either monotheism. In the Yoruba Bola Ige. Some claim the Sharia campaign is more about politics than religion; nationalist OPC, the names of a group of recently arrested militants were that Sani hoped to pressure Obasanjo not to probe Abacha’s supporters, and to Muslim, Christian and traditional Yoruba. The North is different. The Hausa stop the trial of Abacha’s son, Mohammed, and his security chief, Major and Fulani elite regard Islam as essential to their identity and many of them Hamza Al-Mustapha, for murder. Sani’s rival in Zamfara is Gen. Aliyu would see a Hausa Christian as a contradiction in terms. Mohammed Gusau, Obasanjo’s National Security Advisor. The substantial Christian minorities in the Middle Belt - Tiv, Idoma, The North’s heavyweight politicians initially spurned Sani as an upstart from Bachama - are usually included under the Northern umbrella and dominate the a poor and backward state, allied with the Abacha family. Initially, one of the officer corps of the army. Astute northern leaders, such as first national Premier few traditional leaders to take Sani’s Sharia campaign seriously was retired Tafawa Balewa and the first Northern Region Premier, Sardauna of Sokoto Major Mustapha Jokolo, now the Emir of Gwandu, who was aide-de-camp Ahmadu Bello, never allowed religion to obstruct their political alliance with to the former military leader Gen. : Jokolo has strongly the Middle Belt Christians. In return, the Christian minorities in the Middle Belt backed both Sharia and the Arewa People’s Congress, a Northern political and North benefited disproportionately from affirmative action or northernisation group set up to counter the South-West’s militantly Yoruba nationalist OPC. programmes, designed to help the educationally backward North compete on The Sharia campaign has gained so much momentum that its moderate better terms with the South. The Northern elite also saw that alliance with the Muslim opponents risk being labelled un-Islamic. The weak Sultan of Sokoto, Igbo would help it balance the power of the Yoruba elite. Maccido, hopelessly compromised by Abacha’s military clique, lacks the Federalist policies were pursued after the civil war by Nigerian nationalists political skills and the religious knowledge of his late father, Abubakar, and has such as Yakubu Gowon, Murtala Mohammed, Obasanjo, Yakubu allowed Jokolo to push him into supporting Sharia and the APC. Other backers Danjuma, M.D.Yusufu and Ukpabi Asike, to help stitch the country back are Kano’s Maitama Sule and Halilu Akilu. Support for the APC’s Northern together again. Forays into Pan-Africanism and support for the southern nationalism may be growing faster than support for Sharia, because it is pledged African liberation movements countered the pull of religion, ethnicity and to defend Northerners in the South-West, said to have been under attack by the region. By such means, a self-confident northern leadership kept Sharia off the Yoruba OPC. Some OPC militants support Sharia, hoping it will further political agenda for most of the 1970s. Now the Sharia campaign has acquired weaken and divide the north, making it easier for the South-West to secede. a popular following that cannot be wished or decreed away. Obasanjo and Kaduna, once a model of tolerance, acquired its problems less than 20 years Abubakar may find it easier to face down the elite promoters of Sharia than to ago, under the succession of military regimes led by Buhari, Babangida and deal with the tens of thousands of poor and jobless Northern Nigerians who long Abacha. Through neglect and inept politics, they allowed a series of squabbles for change, after two decades of corrupt and inept military rule.

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‘substantial burden’ on the economy, S&P said. Better treatment for SOUTH AFRICA those infected, and success in bringing down the infection rate, are big economic variables. Manuel budgeted an extra Rand 500 million for the government’s anti-AIDS measures. But the official AIDS campaigning still lacks visibility, given the country’s media-savvy Betting on the market advertising industry, and campaigners complain of a lack of funds and sustained government attention. Finance Minister Manuel wins praise for his ● business budget but joblessness is growing The Rand is weakened by the low foreign reserves of $5.9 bn., combined with the system of forward foreign exchange cover inherited Income taxes and the budget deficit are down, defence spending is from the apartheid regime - the $11.5 billion so-called ‘forward up. That conservative combination in Finance Minister Trevor book’. After the rand crashed under speculative attack in late 1998, Manuel’s budget on 23 February won plaudits from business, the government began a new policy. It would not use the Reserve parliamentarians and even trade unionists, and only minor budget- Bank’s foreign currency and gold reserves to shore up the Rand, and bashing from non-governmental organisations and left-wing it would gradually pay off the forward book (which implies a huge activists. For now, the Manuel-Thabo Mbeki consensus on commitment of US dollars). The new Reserve Bank Governor, Tito economic strategy rules. The markets have grown to like the Mboweni, made this clear within days of taking over last August and African National Congress government much more than its National has since reduced the forward book by $1.7 bn. But the only quick Party predecessor, whose legacy of apartheid profligacy, foreign way to pay off the forward book is by raising large amounts of state exchange controls, high interest rates and unskilled workers still revenue from new sources, such as the sale of more state assets. haunts Pretoria’s policy-makers. Although Manuel and Public Enterprises Minister Jeff Radebe are Two days after a confident Manuel read his budget in parliament, speeding up privatisation over the next three years, their programme the most cautious of the United States' ratings agencies, Standard won’t generate anything like the $12 bn. needed to pump up the & Poor’s, raised South Africa’s rating to investment grade, alongside reserves. emerging markets such as China, Malaysia, Thailand, Poland, South Korea and Egypt. South Africa’s new rating is BBB minus, Praise from Standard & Poor's kept at the bottom of the grade by its high interest rates (10.1 per Set against these major structural economic problems, S&P has cent for short-term money), its low foreign reserves ($5.9 billion) much praise for Manuel and Mbeki’s ‘confident management’ and and its low forecast growth rate of 3.5 per cent for the next three ‘credible economic policy’. Now Manuel has to turn to battles on the years. But countries such as Argentina, Brazil, India and Mexico home front. He has been at the sharp end of the behind-the-scenes are placed in the sub-investment grade, S&P’s next division down. struggle over economic policy with left-wing critics within the South Africa’s promotion is a personal triumph for Manuel, who ruling ANC and its allies, the Congress of South African Trade has assiduously lobbied S&P. It makes both government bonds and Unions (Cosatu) and the Communist Party (SACP). Mbeki and the Johannesburg Stock Exchange more attractive to foreign fund Manuel have committed themselves to market economics, and cannot managers, and to companies thinking about fixed investments. turn back. Cosatu and the SACP must either confront the ANC Many US pension funds avoid investing in assets that lack an government soon, or back down. Mbeki’s strategy so far has been to investment rating. stop just short of forcing that confrontation. That is why privatisation Ratings are reviewed annually; the new grade should cut the of state assets, whose total worth is put at R150 bn., moves slowly. premium that the government, and South African-based companies, Only R5 bn.-worth of assets will be sold off in the new financial year, pay on foreign borrowings, which makes a cut in domestic interest and R10 bn. over the two following years. rates more likely. South Africa’s attractiveness to US and other By not selling more of the parastatals now, Mbeki keeps his critics fund managers depends on how well the Mbeki government deals wavering (and weakening). The economic equation is whether the with what S&P describe as three main constraints: revenue benefits of faster privatisation outweigh the political risks ● ‘Persistent structural weakness’ against the background of social of more job losses in the short term. Mbeki and Manuel think not and inequality. The government’s ability to tackle the widening wealth are unconvinced of the merits of an early sell-off of the state-owned gap, rising unemployment and crime is a key indicator for the power utility Eskom. Instead they want to restructure Eskom, which ratings agencies. There is still much confusion about the jobless has been the most successful parastatal since the 1994 liberation figures, which say that 20 per cent of the workforce is looking for elections, and put some of its functions out to private tender. work, and 40 per cent unemployed or underemployed - while the Non-governmental organisations such as the Black Sash (the anti- spaza or informal economy provides work for about half the apartheid organisation founded by women) have criticised the lack underemployed. Official figures for the construction sector show of real increases in social security, child support, pensions, education, a 25 per cent drop in jobs since 1995, although construction has health and housing. Like many ANC MPs they oppose the grown by 2.5 per cent. In fact many building workers laid off by government’s borrowing of $4.8 bn. this year, to finance arms the big companies have set up as independent contractors, but are purchases from Britain, France, Germany and Italy. Social not officially registered and avoid tax that way. As companies in spending for the financial year 2000-2001 is to drop from 57 to 55.8 mining and manufacturing try to become more competitive, the per cent of total spending, while defence spending goes up by 28 per result is huge job-losses, not matched by growth in finance, trade cent (despite Manuel’s objections, we hear). Jobs are the main and tourism. The economy pays the penalty for the lack of training battlefield. Cosatu threatens a series of stayaways leading to a one- and education under apartheid; the National Business Initiative day national strike in May, to protest against job losses which it reckons there is a shortage of 475,000 skilled workers, even as the blames on the government’s market-friendly policies. unskilled are losing their jobs. The most powerful indicator of the government’s pro-market zeal ● The rapid increase in HIV/AIDS infections will impose a was Manuel’s announcement of some R9.9 bn. of tax cuts, for the 3 3 March 2000 Africa Confidential Vol 41 No 5

per cent over the next three years is better than the recent rate, but 5.00% Series 1 GDP growth well below the East Asian levels required to boost employment. 4.00% Bankers consider Manuel’s forecasts pessimistic, but few expect more than 5 per cent growth. How to improve on that performance 3.00% will be top of the agenda at the first meeting of the International

2.00% Investment Council, including such magnates as Bill Rhodes, George Soros and Frank Savage (AC Vol 41 No 4), scheduled for 1.00% mid-year. In the meantime it is up to South Africa’s own businesses to take advantage of Manuel’s policies. If they fail, the going will 0.00% 1996 1997 1998 1999 2000 2001 2002 be tough - both for them and for Mbeki’s government. rich, the poor and small businesses. Manuel said the tax cuts, the first in South Africa since the late 1970s, would boost growth and ANGOLA create jobs. He further relaxed exchange controls for residents (there have been no controls for non-residents for some years). The only bad news for the wealthy was a capital gains tax, to be introduced in April next year. The budget also set the country’s Cleaning diamonds first inflation target, in a band between 3 per cent and 6 per cent, New controls are meant to enrich the to be achieved by the end of 2002 (inflation is currently 7.7 per government and impoverish its enemies cent, forecast to decline to 5.5 per cent in 2000/2001); and it showed that state finances are in the best shape they have been in Angola has transformed the market for its diamonds, cancelling or for decades, with a budget deficit of 2.4 per cent of gross domestic suspending all existing marketing contracts for the stones. The product, projected to rise slightly to 2.6 per cent next year before government claims that this radical shake-up, made by decree on 31 January, will bring huge flows of illegal revenue into the formal tax system. This should both boost its efforts to reach an agreement 0.00% Series 1 with the International Monetary Fund this year and help to restrict -1.00% the flow of ‘dirty diamonds’ from mines controlled by the União Nacional para a Independência Total de Angola, which have been -2.00% finding their way into government-approved marketing channels. Regulation of the industry has been feeble; the government says it -3.00% Budget deficit earned only US$21-25 million in taxes last year, on total sales of -4.00% some $700 mn., and that the new measures should bring in tax revenues of $50-$70 mn. this year. For once, Angolan claims of -5.00% movement towards better economic management and transparency 1996 1997 1998 1999 2000 2001 2002 appear at least partially credible. dropping back again. Angola’s diamonds have flowed along several channels. The In the weeks leading up to the budget speech, Manuel and Mbeki official mining companies, producing stones worth about $10 mn. stared down objections from some cabinet colleagues and senior a month, include the Catoca kimberlite mine, a consortium of the officials who wanted to delay the implementation, from 1 April, of state diamond company, the Empresa Nacional de Diamantes de the tough Public Finance Management Act, passed into law last Angola (Endiama), Odebrecht of Brazil, Alrosa of Russia and Lev year to regulate the spending of state funds. The Act establishes a Leviev, a Russian-Israeli entrepreneur. Other official mining clear line of accountability on expenditure; it creates an ‘accounting companies are the SDM alluvial mine (Endiama, Ashton of officer’ in every government body who must, among other things, Australia and Odebrecht) and the longer established Sociedade publish monthly and annual reports on the state of that institution’s Mineira de Lucapa (Endiama and SPE of Portugal); they mine budget; it lays down that, if a minister issues to the Director fairly small areas, protected by the army plus their own commercial General of a department a directive which has financial implications, security operators. Their easily identifiable diamonds have been this must be done in writing. And all state bodies, however little sold under officially approved contracts, mainly through the public money they use, must publish objectives against which their Endiama Marketing Company. performance can be measured. Diamonds from mines controlled by army generals (and a few Manuel’s forecast of annual economic growth at an average 3.5 others) are sold on informal markets; into this system have leaked Inflation stones mined under UNITA control and others from independent 9.00% Series 1 diggers. Endiama operates in this informal market through joint 8.00% ventures with foreign interests, including United States-based 7.00% Maurice Tempelsman’s LKI, Omega of Belgium and Steinmetz 6.00% (Belgium-Israel), which soak up diamonds from anywhere and 5.00% everywhere - including, amid the complexities, UNITA diamonds. 4.00% Last year, diamonds from sources under UNITA control became 3.00% subject to United Nations’ sanctions and the masters of the world 2.00% diamond trade, De Beers, decided in October that they would buy 1.00% no Angolan diamonds save ‘clean’ stones, under contract with 0.00% SDM. Then on 29 February, De Beers went further to offer written 1996 1997 1998 1999 2000 2001 2002 guarantees that the diamonds it trades have not originated from All economic data from SA Ministry of Finance 4 3 March 2000 Africa Confidential Vol 41 No 5 rebel armies in countries such as Angola, Sierra Leone or Congo- will still be dirty diamonds but fewer of them. Kinshasa. This new system of certification limits De Beers’ Meanwhile, the government is fighting to increase its control of purchases to the government controlled mines in Angola, and De the diamond areas and to replace UNITA there (AC Vol 41 No 2). Beers own operations in Botswana, South Africa and Namibia, as The business interests of some generals in those areas have delayed well as those bought under contract in Russia and Canada. It may reform of the industry yet, while the fighting lasts, the army could also be for De Beers, which until now has controlled about 70 per not possibly control all UNITA’s mining sites, since alluvial stones cent of the trade in uncut stones, a strategic move away from are scattered over vast areas, ideal for defence by guerrillas. One buying on the open market towards the selling of a De Beers brand aim of the reforms is to reduce the extent of the concessions and to gem - free from the taint of the spoils of war. It also fits in with the hand over fringe areas to private companies, whose own security Angolan government’s response to pressure on the diamond issue. operators are often more effective and less likely to smuggle than All informal-sector buying contracts were cancelled by the the army. That could reduce UNITA’s diamond revenues more decree of 31 January. Marketing must now all be done through the effectively than the actions of Robert Fowler, head of the UN Angola Selling Corporation (Ascorp), a joint venture owned 51 per Angola sanctions committee. If UNITA’s involvement is cut, cent by a new state diamond marketing company, the Sociedade de operations in Angola may seem more attractive to foreign investors, Comercialização de Diamantes (Sodiam); the rest belongs to even if they have to work under stricter regulation. Leviev and others, including Sylvain Goldberg of Omega and, De Beers complains that its refusal to buy tainted diamonds has reportedly, Arkady Gaidamak, a Russian with a reputation for cost it dearly. Hennie Vermeulen of Investec bank in Johannesburg extremely robust business tactics. The new Mining Minister, says the new alliance between Leviev and Ascorp has effectively Manuel António Africano, has yet to establish real authority in pushed De Beers out of Angola (although the South African giant the industry and is overshadowed by deputy minister Carlos keeps its kimberlite deep mines). Vermeulen says that Leviev is Sumbula and former Endiama chief Noe Baltazar. The new totally independent of De Beers and that his annual turnover (rough company is bad news for De Beers, not only in Angola but also and polished) in Angola, Russia, Israel, South Africa and Belgium elsewhere in Africa, notably Congo-Kinshasa. comes close to $1 billion. Through his joint venture in Angola, As renegotiations loom, the diamond companies are frantically Leviev hopes both to line himself up for a marketing agreement seeking influential contacts in Luanda and circulating (with help with the Russians, when their current agreement with De Beers from some diplomats) richly defamatory stories about their expires, and to show other African governments that there are successful rivals. At stake is not just a clean-up but wholesale alternatives to the South African connection. Yet everybody redistribution of the spoils. Sumbula tries to soothe the worried knows that the only way to clean up the diamond trade is by investors by saying he wants none of them to leave Angola. He establishing peace, honest government and honest dealers. Sadly, explains that established traders such as LKI, whose chief executive all that is still some way off. Tempelsman visited Luanda in late February, may be able to continue buying stones either through contracts with Ascorp or by some mechanism to be negotiated. Formal-sector marketing SENEGAL contracts such as SDM’s and Catoca’s have been suspended, not cancelled, and will have be renegotiated through a new commission. Meanwhile all diamonds must pass directly through Ascorp. Passion for change Endiama's ambitions President Diouf faces a second round of Endiama will no longer market diamonds but will continue to polling and the opposition scents victory prospect and to enter joint ventures with producing companies; it Changement was on everyone’s lips during the presidential could eventually operate mines itself. Prospecting licences, too, campaign. And change is indeed happening in Senegal. For the will be tightened up; the government complains that some first time, the man who has led one of Africa’s oldest democracies concessions may cover 80,000 square kilometres, while most for 30 years as Premier and then President faces a second-round operators work in areas of about 1,000 sq. km., leaving the rest to ballot (AC Vol 40 No 21 & Vol 41 No 3). Now President Abdou the ‘informal’ miners known as garimpeiros. The government Diouf faces his toughest electoral battle yet. Much of the opposition, wants to hand over these licensed but uncontrolled areas to foreign refusing to be coopted by Diouf’s ruling party, has coalesced companies (with Angolan partners) which can exploit them behind veteran oppositionist Abdoulaye Wade who has coveted efficiently. the presidency for two decades. Rarely for African opposition New concessions will be limited to 3,000 sq. km., subject to groups, Senegal’s oppositionists appear to have buried most of negotiation and with an exception for De Beers, which looks for their differences and stand a real chance of winning against Diouf kimberlite mines rather than the alluvial deposits where illegal in the second round scheduled for 18 March. digging takes place. People with diamonds for sale (including The first round in this presidential poll on 27 February was army generals) may sell them only to Ascorp, not to the usual array generally serene, orderly and, by all accounts, transparent, with a of rival buyers. This should make it easier to control the market and healthy turnout of around 75 per cent. Polling began early and harder for UNITA to sell its stones, especially since diamonds people queued for hours in an atmosphere of high expectation and leaving Angola will need a certificate of origin issued through fierce debate. Youngsters were prominent: for the first time, 18- Ascorp and the country to which the stones are sent will be year-olds could vote. One group of youths told Africa Confidential supposed to acknowledge receipt in writing. However, political that if Diouf didn’t leave, they would ‘fight’. Violence had been chaos and military activity in the mining areas will make it expected in towns: it’s been a feature of previous polls. Apart from impossible to guarantee that UNITA generals do not sell to election monitors and journalists, Dakar was almost empty of government generals or others, who then sell on to Ascorp. There foreigners: embassies had told their nationals to stay at home.

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Technology has reduced the possibilities of fraud: the ubiquitous elections. Yet on 20 February, rebels killed a guide and driver near mobile telephones kept party officials updated from the remotest the touristically important Club Med at Cap Skirring and two polling stations while private radio stations gave the polls 24-hour soldiers died on 22 February near the border with Guinea Bissau. coverage with passionate late-night debate. One journalist told us Elsewhere, 28 kilometres from Dakar at Rufisque on 23 February, they were there to ‘support the process of change and the the house of the PS Deputy Mayor was burned down, as was that of monitoring’. another senior PS official in Thiès the following day. Gangs of The next day, Diouf, 65, greeted his apparent first-round defeat, youths went on the rampage after one of Wade’s lively rallies in with just over 40 per cent of the vote, with his usual calm dignity, Dakar; the capital is noted for a tradition of political rowdiness. despite having to face the run-off which he narrowly escaped in Had Diouf won outright, there might have been much more violence. 1993. Seven years ago, he won outright with 52 per cent of the All the opposition candidates promised to make everything first-round votes. Even this was a far cry from his first triumph in better for everybody, with few details of how to pay for it. Diouf 1983, when he scored 83.5 per cent as the anointed successor of said he had kept Senegal united and stable, with economic growth founding president Léopold Sédar Senghor. This time Diouf had averaging 5 per cent a year and inflation around 1 per cent. Under to take his share of the five-minute radio and television broadcasts pressure to change the constitution from a presidential to a granted to all candidates; once he overran his time and was cut off parliamentary system, he agreed that there should be a referendum in mid-flow. on the issue. Diouf has said he will step down gracefully if he loses but if he wants to make a stand, he could offer Niasse and Kâ the Ringing theChangement places at his right hand they occupied before being displaced by his The most popular election slogan has been ‘Changement!’ but the protégé and campaign manager, Tanor Dieng. main contenders were familiar. All candidates had served as That tactic looks less likely to work after Niasse announced on ministers in Diouf’s governments and the oldest of them was his 1 March that he would support Wade in the next round. We hear seasoned opponent, 74-year-old Wade of the Parti Démocratique that the PS was making big promises to get Kâ back into the party Sénégalais. After being runner-up in the previous poll in 1993, fold. As Africa Confidential went to press, results were still Wade agreed to join Diouf’s government from 1995 to 1998, when coming in: all the indications are that the second round will be he left to get ready to stand against him again. closely fought. Although Diouf faces a more cohesive and This year, Maître Wade easily topped the poll in Dakar as reinvigorated opposition, he will have all the advantages of candidate of the coalition Alternance 2000. This includes eight incumbency behind him. And as in previous polls, there are those leftish parties as well as his own: in Senegal, most parties are to the in the PS who consider it their duty to ensure their leader wins - at left, in name at least. Wade is Vice-President of the British-based any cost. It is up to the 13 international agencies and their election Liberal International, yet the popular left-wing leaders Abdoulaye observers (invited by the government) to watch the political Bathily and Landing Savané were at his side throughout the desperados on both sides. An observably free and fair election in campaign and the team was cheered by vast crowds, many of their Senegal would break the historical mould - and send positive members too young to vote. signals to much more fragile governments along West Africa’s Diouf failed to win outright largely because a slice of his party’s coast. vote was taken by the heavyweight Moustapha Niasse, another protégé of Senghor’s, once Diouf’s Foreign Minister and latterly, United Nations Special Representative in the Great Lakes Region. TANZANIA Only last June did he quit the Parti Socialiste, announcing that he would stand against embezzlement, Mafia-type rule, threats to democracy and the inheritance of power (this meant Diouf), at the Offshore turbulence head of the Alliance des Forces du Progrès. His campaign was smooth and sober, with carefully composed speeches to carefully The retirement of President Amour composed crowds. Coming third, he is now kingmaker: he can ask solves only one of the islands' problems virtually anything of Wade in exchange for his support in the After months of argument, culminating in President Salmin Amour’s second round. Though Wade could win the next round, people are threat last month that he was about to ‘drop a bombshell’, the Zanzibar already looking beyond the Diouf-Wade polarisation and seeing saga appears to be over, at least for the time being. After days of often Niasse as a ‘third force’. tumultuous top-level meetings of the governing party, the Chama Cha Also in a powerful position is another ex-minister (variously of Mapinduzi, Salmin announced that he wouldn’t run for a third five- Education, Planning, the Interior and Foreign Affairs), Djibo Kâ. year term. The CCM National Executive Committee also decided to The leader of the Union pour le Renouveau Démocratique stood postpone proposed changes to the Zanzibari constitution till after for the usual progressive causes, plus a limit of two five-year terms October’s parliamentary elections. for future presidents. His party first contested the parliamentary The opposition, both on the islands and the mainland, had opposed elections of 1998, when it split from the PS and won twelve the proposals, which appeared designed to give Salmin a third bite of constituencies, mainly on the votes of his fellow Peulh (Fulani). the cherry. The NEC meeting on 26 February followed similarly However despite his energy and eloquence, he came only fourth in fraught Central Committee meetings on the previous two days in the presidential poll, Dodoma. This in turn followed four days of debate by the CCM in Voting was peaceful; of 8,000 polling stations, only three, in Zanzibar. The party emerges from the affair bruised and divided. the troubled southern region of Casamance, were unable to function, Everyone had expected that, with the death of former President after a rebel rocket attack. The third ceasefire agreement signed on on 14 October last year, the Union between Zanzibar 27 December in Gambia saw the government withdraw some of its and the Tanzanian mainland would come under strain. It was the troops from the area, with commandos shifted to Dakar for the brainchild of Mwalimu and for 35 years, he disciplined those who 6 3 March 2000 Africa Confidential Vol 41 No 5 grumbled about it. Sure enough, his departure brought serious rioting shelve the proposed amendment. Another group of 52 CCM MPs, in Zanzibar, as yet another politically tainted court case got under way; including the Deputy Speaker and ten former ministers, censured on the mainland, security was tightened around the Union parliament Salmin for trying to amend the constitution. in Dar es Salaam, as it set to work on the proposed constitutional The issue is far from finished, for the betting was that the CCM changes. would force its amendment through. This would further embitter the The 1977 Constitution has been amended many times, bringing its atmosphere in Zanzibar, where little progress has been made on original 95 provisions to 152. In July 1998, a Commission on implementing the Commonwealth-brokered agreement of 10 June Constitutional Reform under Justice Robert Kisanga was set to look 1999 (AC Vol 40 Nos 11 & 21) which was intended to ease tension at some 20 controversial issues. The Commission’s conclusions between the CCM and the Zanzibari opposition, the Civic United prompted the government to propose yet more changes, collectively Front (CUF). known as ‘the 13th amendment’. The opposition in the Union parliament is led, with increasing The most challenging subject remains the structure of the Union. militancy, by Fatma Maghimbi from the CUF; she has given warning Three options are proposed: Tanzania should be ruled by a single of bloodshed unless the CCM stops rigging Zanzibari elections ‘as government (utterly rejected by Zanzibaris), by three governments they did in 1995’. On the mainland, though, the CCM - helped by (for Union, mainland and Zanzibar) or, as at present, by two friction both between and within the opposition parties - has won all governments, one for the Union, one for Zanzibar. The only similar recent parliamentary by-elections and had a success rate of over 95 per arrangement to the existing one, a veteran Zanzibari lawyer used to tell cent in local elections held around the country in November. his visitors, was the junior parliament set up by the United Kingdom For mainlanders, the most embarrassing aspect of Salmin Amour’s for Northern Ireland. (After decades of failure, it was abolished a government and its most obvious abuse of the opposition’s rights quarter of a century ago). remain its charges of treason against 18 CUF leaders, whose trial at last opened on 19 January (when some 70 people were injured in riots Dual administration outside the High Court). The accused have been held in gaol for two The Constitutional Commission found that those it consulted years. Amnesty International, on 27 January, called on the Zanzibar overwhelmingly preferred the two-government system, even though government to release these ‘prisoners of conscience’. Protests were it has produced many embarrassments and gives tiny Zanzibar a far presented to Commonwealth Heads of Government when they met in more than proportional share of parliamentary seats and government Durban, South Africa in November and Western diplomats in Dar es jobs. Union President Ben Mkapa and his CCM have tried to pre-empt Salaam keep the issue at the top of their agendas on regular visits to further discussion by ruling that the present set-up will continue. That President Salmin. is certainly not the end of the matter. A call to stop the trial was been made to Salmin Amour by 45 CCM The government’s postponed constitutional changes include: Union MPs and there has been confusion even within his own ● the appointment by the President of ten members to the Union government. Zanzibar’s Attorney General, Mohamed Ali Omar, had Parliament. (The entire Zanzibar cabinet sits in parliament not by insisted he could not proceed with the case unless eight more CUF election but as Salmin’s nominees). leaders, including Vice-Chairperson Seif Shariff Hamad and Secretary ● an increase from 20 to 30 in the number of nominated women General Shabaan Mloo were also arrested. However, the government members of parliament. saw that this would cause a local and international outcry and the ● that the Tanzanian President, who at present must win at least half Union Minister of Home Affairs, Ali Ameir Mohamed (himself from the total votes cast, be elected simply by getting more votes than any Zanzibar) made it clear that he wanted no more arrests. In January, other candidate. when the Attorney General continued to insist on the arrests, he was For once, the 41 opposition MPs (of a total of 275 in the Union sacked. The trial has again been postponed, till April. parliament) united, pooling their limited funds to petition the High President Salmin Amour had tried a conciliatory gesture in January, Court on the mechanism for changing the constitution. They claim the when he announced that the former Sultan, Jamshid bin Abdallah amendments must be supported by two-thirds of members of both the bin Khalifa, who was overthrown in the bloody revolution of 1964 Union and the Zanzibar houses, which would allow the opposition, and exiled in Britain since then, was free to go home as a private with almost half the seats in the Zanzibar parliament, to block any citizen. The opposition treated this gesture with something approaching amendment. The Attorney General insisted that a simple majority in contempt. the Union parliament was all that was needed, so that the ruling CCM could push through any amendment it wished. Vist the AC website: www.africa-confidential.com For its part, the opposition wants to drop from the constitution a Published fortnightly (25 issues per year) by Africa Confidential, at 73 clause enshrining Nyerere’s slogans of (self-reliance). Farringdon Road, London EC1M 3JQ, England. Tel: +44 (20) 7831 3511. Fax: +44 (20) 7831 6778. However, it reserved its main opposition for the government’s proposal Copyright reserved. Edited by Patrick Smith. Deputy: Gillian Lusk. to enable Salmin to seek a third term when his current one runs out in Administration: Clare Tauben. July. CCM is having trouble identifying a similarly assertive candidate. Lawyers, academics and politicians of all persuasions say this is a Annual subscriptions, cheques payable to Africa Confidential in advance: UK: £278 Europe: £278 breach of democracy. Before his death, Nyerere made it clear that he Africa: £258 USA:$697 (including Airmail) opposed it and the ruling party was divided even before last weekend’s Rest of the World: £361 squabbles. CCM Vice-Chairperson accused the Students (with proof): £79 or US$126 All prices may be paid in equivalent convertible currency. We accept opposition of taking funds from foreign countries (Canada and American Express, Diner’s Club, Mastercard and Visa credit cards. Denmark - they both deny it) to help them oppose the change. Union Subscription enquiries to: Africa Confidential, PO Box 805, Oxford OX4 Vice-President (a Zanzibari, with an eye on the island 1FH England. Tel: 44 1865 244083 and Fax: 44 1865 381381 presidency) was against keeping Salmin in office and 45 CCM MPs in Printed in England by Duncan Print and Packaging Ltd, Herts,UK. ISSN 0044-6483 the Union parliament plucked up their courage to petition Salmin to 7 3 March 2000 Africa Confidential Vol 41 No 5

Paul Biya’s in Cameroon. Faced with criticism Pointers USA/AFRICA that the Summit risked overlapping with the Corporate Council for Africa, Robinson promised to consult more widely about its future. MOZAMBIQUE Quarrelsome lobby Despite its star speakers, the event got negligible coverage in the parochial US media. The National Summit on Africa in Washington The US government turned out in force: Clinton, Killer floods on 16-20 February attracted several star Vice-President Al Gore, Secretary of State speakers, such as United States President Bill Madeleine Albright and Assistant Secretary of With killer flood waters continuing to rise across Clinton and Organisation of African Unity State for Africa Susan Rice all spoke. Yet southern Mozambique, over 350 people have Secretary General , and Robinson, despite his Republican credentials, died so far in the disaster, which was provoked some 2,300 delegates. Its aim was to push failed to bring in any of the party’s presidential by torrential rains in February followed by a African issues up the foreign policy agenda. candidates or their main surrogates. Delegates cyclone. The Limpopo River has broken its Yet the summit failed to resolve the problems of had to be content with former Representative banks, flooding swathes of land. The Save and building a political coalition for Africa capable Jack Kemp and the current Republican Chair Zambezi rivers are also flooding and the situation of matching other foreign policy lobbies, such of the House Africa Subcommittee, Ed Royce. is expected to get worse before the waters recede. as those on Israel or Latin America. In the towns of Chokwe and Xai Xai, Any Africa lobby in the US system risks hundreds of people climbed into treetops or pitting an alliance of grassroots African- ZIMBABWE onto rooftops to escape the water. As we went American and radical white activists against the to press, thousands were waiting to be rescued big corporations operating in Africa. The before they died of hunger or, with terrible divisions between those constituencies caused Running on empty irony, of thirst. Some people managed to build ugly infighting at the summit. Leading African- platforms in trees and tied bicycles and other Americans such as the former Ambassador to The fuel crisis is deepening despite the belongings to branches. These apocalyptic the United Nations, Andrew Young, and former government’s recent deal with BP Amoco for scenes flashed around the globe, filmed by Democratic presidential contender Jesse shipments through the Beira pipeline. Ships journalists in helicopters and light aircraft. Yet Jackson, spoke at the conference but failed to delivering fuel to Beira were halted by the a month after the waters rose, rescue efforts produce a unified platform. cyclone which ravaged Mozambique in late were relying on only twelve helicopters, mainly The official delegates, who were elected at February. About 75 per cent of Zimbabwe’s from South Africa but also from Malawi and six regional conferences over the past two years fuel comes through Beira, the rest overland France. President Joaquim Chissano on 1 financed by the Ford Foundation and the from South Africa. The floods have blocked March said international aid was arriving too Carnegie Corporation, approved a 254-point both routes. The resulting economic paralysis slowly and estimated that one million people National Policy Plan for US-African relations. will further damage the chances of the ruling had been displaced. These proposals reflected the split between the Zimbabwe African National Union-Patriotic Zimbabwe has been unable to assist, being Summit’s corporate backers and its activist Front in April's parliamentary polls. in the midst of an acute fuel crisis and needing participants. They ranged from demands for After the weather subsides, the parlous its helicopters to assist in its own floods - and in debt writeoffs and an end to International finances at the state-owned National Oil its involvement in the Congo-Kinshasa war. Monetary Fund adjustment policies to a ban on Company of Zimbabwe (Noczim) are still likely Botswana on 29 February granted Harare a line landmines and small arms sales to Africa. They to choke off fuel supplies. Industry sources of credit and was sending in 20 mn. litres of fuel also cautiously endorsed the Africa Growth and reckon Noczim owes almost US$1 billion to and donating a further million litres to Maputo Opportunity Act, different versions of which suppliers such as South Africa’s Sasol, Engen, for flood relief. Sweden gave $1.15 mn. but are due to be thrashed out between the Senate BP Amoco and Kuwait Oil. Foreign exchange Britain’s Whitehall departments, locked in a and House of Representatives in early March. cover is down to a few days, so there is no dispute over funding and logistics, finally funded There is a major schism between Summit prospect of imminent repayment. Noczim needs four helicopters from the region and promised President Leonard H. Robinson, and the small $36 mn. a month for new fuel supplies, let alone five more. The United States government executive committee which backs his aim of pay for old ones. approved an additional US$10 mn. in aid. making the Summit a permanent ‘corporate- Under pressure from within ZANU-PF, Portugal, the former colonial power and current friendly’ lobby on Africa policy, and the many Transport and Energy Minister Enos Chikowore European Union President, dispatched its members of church and human-rights groups resigned on 25 February. President Robert Secretary of State for Development, Luis with roots in the anti-apartheid movement. Mugabe has taken over the portfolio. Though Amado, to Maputo to assess what ‘further Activists complained about the Summit’s Noczim's Chief Executive, Nicholas Ncube, is support’ the EU could give. ‘top-down’ organisation, lack of transparency widely respected, he has inherited a bureaucratic Although a disaster industry has sprung up and failure to consult other African activists. nightmare which is reckoned to have cost in the West in recent years, with institutes, One of the Summit’s original board members, Zimbabwe $1.5 bn. in the past five years. journals and early warning systems, no one was and Africa studies head at the Council for Noczim’s supplies to the Zimbabwean able to react rapidly, let alone give an early Foreign Relations, Saleh Booker, resigned two Defence Force in Congo-Kinshasa further warning to Mozambique. The catastrophe has years ago and remains critical of Robinson’s complicate matters. The Defence Ministry boosted dialogue between the ruling Frente de approach. Activists were incensed when bought Jet A1 fuel directly from Noczim, Libertação de Moçambique and the Resistência Kenyan President Daniel arap Moi, the only bypassing the oil companies. Questions are Nacional Moçambicana. After a round of talks African head of state present, addressed the now being asked about the accounts. Initially, on 28 February, Renamo leader Afonso Summit. ‘Hardly a good image for the new officials had told the International Monetary Dhlakama suspended his decision to form a Africa,’ commented one activist. Fund all the military’s fuel supplies were government for the provinces won by Renamo Robinson was a deputy to Assistant Secretary financed by the Congo government or else by a in December’s elections (AC Vol 41 No 2). Yet of State for African Affairs Chester Crocker $100 mn. gift from Libya. The suspicion Dhlakama has other problems. On 10 February, during Ronald Reagan’s reign, then joined a surrounding these deals will make it even harder 16 senior Renamo ex-combatants issued an open lobby firm whose clients included the Nigerian for the government to raise the credit to buy letter to him, threatening trouble unless he government of General , more fuel and will lock the economy further into addressed their grievances. Gnassingbé Eyadéma’s regime in Togo and recession. 8