Africa Rising?

Nigeria, Africa's biggest oil producer, gets more than 90 percent of its foreign earnings and two-thirds of its tax revenue from oil exports. Yet there are many reasons why that hydrocarbon bounty is a mixed blessing.

For starters, it can drive up the value of a nation's currency, making other exports less competitive and imports more attractive. As Burgis points out, textiles used to be Nigeria's most important manufacturing industry. But cheaper Chinese imports smuggled in by Nigerian gangs (an illicit trade worth more than $2 billion a year) have devastated the industry -- one example of why Africa produces just 1.5 percent of global manufacturing output, despite its abundance of cheap labor.

Billions of dollars in oil revenues are also a tempting pot of money for bent politicians. One 2012 report said corruption had swallowed up $37 billion worth of Nigeria's oil money over the last decade. That surpasses the annual economic output of more than half the nations in Africa as well as Nigeria's annual federal budget. Such corruption has other toxic effects. Dirty money from bribes and kickbacks has to be laundered, and because those doing the cleaning don't care so much about profit or productive investment, their infusions of cash distort the value of assets.

Nigeria's reliance on oil for tax revenues also creates a perverse political dynamic: As Burgis puts it, "the ability of rulers of Africa's resource state to govern without recourse to popular consent." Instead of having to do right by taxpayers to win their votes, politicians focus on controlling and dispensing mineral wealth to bolster their patronage networks. "Politics becomes a game of mobilizing one's ethnic brethren," Burgis notes -- a contest with dangerous destabilizing effects in Nigeria's fractious polity. In fact, as one Nigerian governor explains, if he failed to share the wealth, ill-gotten or otherwise, "I've got a big political enemy."

Nigeria is far from the exception. At least 20 African countries are what the International Monetary Fund calls "resource-rich": that is, their natural resources account for more than one-quarter of exports. From the coltan mines of the Democratic Republic of the Congo and Guinea's rich bauxite and iron ore deposits to the diamond fields of Zimbabwe.

This looting depends on an all-too-willing cast of outside partners, whether Western mining and oil companies that bribe and abet massacres, or shady shell companies in the British Virgin Islands. The World Bank's International Finance Corporation, backs visibly corrupt, environmentally destructive, or just plain inequitable oil and mining ventures in Chad, Guinea and Ghana -- all countries it was supposed to be helping. Western criticism of China's growing presence in Africa carries a distinct whiff of hypocrisy. 

Quote of the Day (colonial scramble for Africa)

“We have been engaged in drawing lines upon maps where no white man’s feet have ever trod; we have been giving away mountains and rivers and lakes to each other, only hindered by the small impediment that we never knew exactly where the mountains and rivers and lakes were” – Lord Salisbury, British Prime Minister.

Total V. Uganda

Earlier this year, the French oil company Total filed a request for arbitration against the government of Uganda using a legal mechanism, known as ISDS (investor-state dispute settlement.) ISDS is mainly used against developing countries. Sometimes because they clearly behaved badly towards an investor, but in other cases it’s more likely that it is used as a bargaining tool and a threat by multinational companies for better deals. Litigation costs amount to 8 million dollars on average, calculated the Organisation for Economic Co-operation and Development.

The French oil company Total is refusing to pay tax. It acquired a 33 per cent share in a 2.9 billion dollar project owned by Tullow Oil. According to Ugandan law, when a stock is bought, a stamp duty must be paid. However, the oil firm refuses to do so, citing no legal obligation to honor the government claims. Total has not disclosed how much tax is at the heart of the dispute or why it objects to the tax levy but a source at the Uganda Revenue Authority told Reuters earlier that the Production Sharing Agreement (PSA) includes a tax waiver.

Total’s Corporate Affairs Manager Ms. Ahlem Friga-Noy stated that “given the applicable confidentiality obligations, we are not in a position to comment further on the proceedings.”

The Office of the Attorney General of the Government of Uganda replies in the same manner: “We are under obligation not to disclose the content of the matter to the public until it is appropriate.”

In a court room all affected parties and stakeholders have the right to speak, or at least listen, but an arbitration procedure is very secretive. No one is obliged to disclose details. Has the state really behaved badly? Or is it the company who abuses arbitration as a pressure to get a tax reduction? The public remains completely in the dark, until the final verdict of the tribunal is published, which can be a multimillion dollar fine.

The problem Uganda now faces has been made possible by the Bilateral Investment Treaty signed in 2000 with the Netherlands. According to the treaty, all Dutch investors in Uganda have the right to pursue arbitration before the World Bank court if they feel treated unfairly. The French company Total Uganda registered itself as a Dutch company. This is known as the Dutch Sandwich; you put a Dutch company in between and then you become a Dutch investor. Which turns the treaty into a tool to drag a state before a tribunal of three men in Washington, having a commercial background and the ability to award billion dollar fines, without a possibility to appeal. If Uganda is condemned to a compensation but refuses to pay, the company has the right to seize Ugandan assets in the world.

This is against Ugandan law, says the renowned Human Rightslawyer Isaac Ssemakadde. “According to the constitution, taxation is wholly the creation of the law of the state.” Which means that disputes have to be settled on the basis of the law alone. “Even an agreement between parties cannot supercede the obligation fixed in the law. There is therefore no room for arbitration on taxation,” he said.

“In an earlier tax dispute, between Heritage Oil and Gas against Uganda Revenue Authority, the High Court has forbidden the state to refer proceedings to the arbitration processes in London or anywhere else outside the jurisdiction of the Ugandan courts of law,” noted Ssemakadde. In short, “Total is being treated differently to other business persons which is in violation of article 21 of the constitution of Uganda which states that all persons are equal before and under the law.” Nobody can check Total’s claims about a tax waiver, because the Product Sharing Agreements are confidential. This is so despite the fact that Uganda has an Access to Information law that was promulgated in 2005. This limits the discussion, and knowledge, about the proceedings in the country’s oil sector to senior politicians and bureaucrats. The ordinary Ugandan is kept in darkness about what happens there. The secrecy is not only advantageous for oil companies, but also for certain politicians, who seem to be interested in “personalizing” the oil resources. The Ugandan president Yoweri Museveni recently told Ugandans that those people who are challenging him politically in the forthcoming general elections “are after my oil.”

“In the end, it’s the ordinary Ugandan taxpayer to bear the brunt and consequences for the enormous amounts of money that is going to be spent on this arbitration process,” says Ssemakadde. “Whereas Total can afford to maintain a given team of lawyers in Washington for, say, a month, Uganda can hardly afford this.” The people remain ignorant about the deals that are made, and who exercises pressure on whom. Unless the general public starts to view the oil, as well as the treaties their government signs, as belonging to them and not the selected few in government, companies like Total will continue dragging the state into expensive arbitration processes. 

Merry Marxmas

Zambian Sexual Violence Condoned

Zambia pardoned a singer who was convicted of the rape of a 14-year-old girl - then appointed him as an ambassador in the fight against gender violence.

Clifford Dimba, known as General Kanene, was convicted in 2014 and sentenced to 18 years in prison, but was pardoned by President Edgar Lungu after serving one year. Since his release, the singer has been involved in two further incidents of violence against women, according to the United Nations Council of Human Rights.

“Such an outrageous release and appointment as an ambassador for the fight against gender-based violence not only traumatises the victim all over again but discourages other victims from reporting similar offences,” said Dubravka Šimonović, UN Special Rapporteur on violence against women, its causes and consequences. “The pardon and appointment undermine the strong message against sexual abuse of women and girls that was sent with the original sentence and trivialise the serious nature of these offences. Rather, Clifford Dimba has been placed in a prominent position and even portrayed as a role model to fight violence against women” Ms Šimonović added. 

From An African Correspondent in 1922

From the July 1922 issue of the Socialist Standard 17th May, 1922.  As you may have noticed, events in Nairobi took a serious turn about two months ago. The Press, as usual, describe the occurrence as a riot, though in actuality the first exercise of violence proceeded from the forces of “law and order.” They arrested a proletarian propagandist of democratic ideas, a native named Harry Thuku, on a “special warrant,” which appears to obviate the necessity of a public trial as a preliminary to imprisonment. As a result of this, several hundreds of natives assembled and held a mass meeting outside the police barracks, which lasted for something like eighteen hours! In fact, from the evening of one day till noon the next the crowd remained in the hope that their petitions to the authorities and their prayers to God (their most active spokesman being obviously mission educated) would result in the release of Thuku. The authorities, however, put their faith in things more tangible than ancestral spooks, and called out a detachment of the King’s African Rifles. This in spite of the fact that up till that time neither person nor property had been damaged, and the demeanour of the crowd was (according to the evidence of the police chief) “orderly and peaceful,” and reminded the local State parson of “a Sunday School picnic ”;while the police were armed. The arrival of the military was the signal for the beginning of the tragedy. A stampede among the crowd took place which was subsequently described as “an attack on the barracks.” The police fired, killing over a score and wounding about thirty others, whereupon they left the barracks and proceeded to clean up the streets, ably assisted by the K.A.R. At the subsequent inquiry into the incident it transpired that the police (a native body) had fired without orders! But, as the learned presiding magistrate observed, “if the authority of the Government was to be maintained, the firing must be justified.” And so, of course, he justified it. The casualties on the Government side were nil; those on the other side included women and children. No wonder the Daily Mail and other rags thought it necessary to drag in the bogey of Bolshevism, trusting in popular ignorance and credulity to swallow the ludicrous myth. The causes of the agitation with which Thuku was associated were described at the beginning of the year in the pages of the Socialist Standard. Most important of these were the increase in Hut and Poll taxes, decrease in wages, the system of native registration and the absence of any form of political representation. Thuku was instrumental in forming the original Kikuyu Association, but as this body soon fell into the hands of a junta of Government-paid chiefs, and sought to exclude all but Kikuyu, he and others withdrew and formed the East African Association, a body aiming to unite all native tribes and races to gain political equality. He also incidentally exposed the corruption of the above-mentioned chiefs, as instanced in their acceptance of bribes from European planters for procuring labour! In vain did they retaliate by endeavouring to prevent their tribesmen from listening to Thuku. The natives flocked in thousands to his meetings, and their spontaneous demonstration following his arrest, while fatal as tactics, afforded ample evidence that they, in the mass, endorse his views. The massacre has simply intensified the bitterness with which they regard their oppressors.T Eric Boden

Africans pay to help one another

Africans in the Diaspora sent home $33 billion in 2014 to their relatives or friends to help pay for living expenses, education, health care and even to start a business. Nigerians living overseas sent home $21 billion in 2014, according to the World Bank

The money sent to home countries from diasporans living abroad, also called remittances, are often the financial lifeline sustaining many African families, benefitting some 120 million people across Africa. The remittances are making a significant impact on household spending and improved livelihoods of whole communities. Due to remittances to families, living expenses and emergencies are paid for making life easier in very difficult economic circumstances. A recent World Bank study revealed that remittances are also boosting the usage of new technologies such as mobile phones in African households. In fact, Africa is the fastest growing region for mobile markets.

African diasporans pay more to send money to their home countries compared to Diaspora groups in other regions of the world. In some cases, African diasporans pay twice the global average, according to the World Bank. South Africa, Tanzania, and Ghana are the most expensive sending countries in Africa, with fees averaging 20.7 percent, 19.7 percent, and 19.0 percent. Western Union and MoneyGram are the top money transfer companies in Africa. A diasporan sending money to Africa will frequently incur what economists call a "super tax", where the sender pays exorbitantly high fees, sometimes up 50 percent more than the global average, reducing the actual amount of funds transferred. Diasporans have expressed a need for a simple, immediate and direct money transfer system to pay for family members' expenses.

Diasporans' money to family members outpaces international assistance from donor countries, and is the largest international flow of financial resources to Africa.

Aid for Farmers Fails

The message from farmers’ groups in Tanzania is clear. They don’t want an agricultural system that is dominated by large transnational companies; they don’t want to be dependent on purchasing synthetic fertilizer, pesticides and herbicides; and they certainly don’t want a commercialized seed system that sees them being forced in to purchasing new seeds every season.

‘Tell your government to stop helping big corporations coming to Tanzania and profiting from small-scale farmers in order to build their corporate empires,’ was just one of Janet Moro’s impassioned messages she had for the UK. As the founding director of Sustainable Agriculture Tanzania (SAT). SAT’s focuses on organic farming techniques that use only locally available resources means farmers are entirely self-sufficient and the soils and local environment are protected.

It’s not just SAT; there are other projects across the country where small-scale farmers are rejecting synthetic inputs and mechanized production methods. Chololo Eco-village in Dodoma, a particularly dry part of the country, is another such example. Between 2011 and 2014 farmers have more than doubled their crop yields following the adoption of techniques such as crop rotation, intercropping and open pollinated breeding for improved seeds.

Tanzanian farmers do not need schemes like the G7’s New Alliance to improve their yields and continue to feed the world’s population. This argument is all the more convincing because these farmers aren’t driven by an inherently anti-corporate agenda; they simply want to see their produce flourish. And what increases yields the fastest involves utilizing local natural resources, rather than purchasing foreign synthetic inputs and technologies. It is clear that the future of our food systems rests on ensuring small-scale farmers – not corporations – are the ones in control.

Schemes such as the G7’s New Alliance for Food Security and Nutrition, which, despite its name, is all about pushing policy reforms to expand industrial agriculture and attract private investments. In the three years since its launch, the New Alliance has been widely criticized by numerous civil-society groups that have highlighted how the policy reforms and investments have had an array of disastrous outcomes. From landgrabs to farmer debts, and from policy reforms that favour businesses over farmers to seed law amendments which endanger century-old farming practices, the evidence is clear: the New Alliance is going against the interests of small-scale farmers, rather than supporting them.

Stanslaus Nyembea, the policy analyst and legal officer at Mviwata, a nationwide farmers’ group that represents some 200,000 small-scale Tanzanian farmers is worried about the encroaching takeover of Tanzania’s agriculture sector by transnational corporations. ‘We see a big risk that foreign corporations want to control the agricultural sector in Tanzania, especially the markets around seeds, fertilizers, chemicals and other agro inputs,’ he said. ‘This is a serious risk to small-scale farmers who might lose their land, which is integral to their livelihoods.’

The former rapporteur on the right to food, Olivier De Schutter, an expert on food security reports that the New Alliance is ‘seriously deficient in a number of areas’, in particular for its silence ‘on the need to shift to sustainable modes of agricultural production’, its failure to ‘support farmers’ seed systems’ and its inability to recognize ‘the dangers associated with the emergence of a market for land rights’. He goes on to berate the New Alliance for ‘only selectively [referring] to existing international standards that define responsible investment in agriculture’ and only paying ‘lip service’ to addressing the needs of women, which is ‘effectively creating the risk that women’s rights will be negatively affected as a result’. Most crucially for a programme designed for food security and nutrition, it is ‘weak on nutrition, hardly acknowledging the links between agricultural production, food and health, and the need to support healthy and diversified diets’.

One World - One People

A group of Muslims protected Christian passengers when suspected Islamic extremists ambushed a bus in Kenya, according to eyewitness accounts. The attackers ordered people off the vehicle in Mandera before telling them to split into groups of Muslims and non-Muslims. They were trying to identify who were Christians and who were not. They told the non-Christians to return to vehicle. The Muslims refused their demands - daring the alleged extremists to kill them too.

Nicki Minaj should be ashamed of herself

US rapper Nicki Minaj has gone ahead with a concert in Angola despite a rights group asking her to cancel it. The Human Rights Foundation (HRF) said in a letter that the money to pay her came from "government corruption and human rights violations".

Minaj posted a photo of herself with Angola's flag on Instagram along with one of her posing with Isabel dos Santos with the words: "She's just the 8th richest woman in the world. (At least that's what I was told by someone b4 we took this photo) Lol. Yikes!!!!! GIRL POWER!!!!! This motivates me soooooooooo much!!!!"

Transparency International recently named billionaire, Isabel dos Santos, as one of 15 symbols of grand corruption worldwide.

Minaj's "girl power" is based upon the political power of the billionaire's father's corrupt dictatorship and the exploitation of Angola's poverty ridden people. Shame on unthinking, uncaring Minaj. 

Her performance came a day after a judge ordered the release of 15 Angolan activists, including prominent rapper Luaty Beirao, who were arrested six months ago during a book reading where one of the books on the agenda was about non-violent resistance to repressive regimes. The group will return to court next month for their trial's conclusion on charges of "rebellion" and attempting to carry out a "coup".

Free Trade or Fair Trade

Social movements have long criticized the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT), where rich countries consolidate power and rig trade rules in their favor, at the expense of the developing world. Perhaps the best example of this is the issue of cotton subsidies. The US chooses to protect the interests of 20,000 rich cotton growers at the expense of the lives and livelihoods of millions of farmers and their children in West Africa.

Cotton is a major source of livelihoods for poor farmers in the West African countries of Burkina Faso, Mali, Benin and Chad, known in WTO negotiations as the Cotton 4 (C-4). They have been feeling the direct impact of the subsidies provided to cotton growers in the United States, which suppress cotton prices and result in lower incomes for African cotton farmers. Over a decade ago, the US agreed to resolve the issue of cotton subsidies 'ambitiously, expeditiously and particularly'. But the US did not take action. Instead, it took advantage of its financial and political power, choosing to ignore the impacts it was having on the lives of some of the poorest people on the planet. Even a case brought by Brazil at the WTO, could not stop the US from artificially suppressing cotton prices. And at this year's talks, the US refuses to even discuss the issue of cotton.

In fact, Brazil won a case against the US cotton subsidies at the WTO, yet the richest country in the world is successfully playing with the rules. While promoting itself as WTO compliant, the US supports its cotton growers to the tune of $1.5 billion annually as estimated by International Centre for Trade and Sustainable Development. This suppresses world cotton prices at least by 7% - or a loss of $3.3 billion for cotton producing countries. Among them are the four poorest countries in West Africa, which will lose $80 million per year.

http://www.huffingtonpost.com/marie-clarke-brill/us-corporate-cotton-vs-af_b_8818258.html

Bribery kills

British American Tobacco illegally paid politicians and civil servants in countries in East Africa. Paul Hopkins, who worked for BAT, a British company, in Kenya for 13 years, said he had begun paying bribes after being told it was the cost of doing business in Africa.

"BAT is bribing people, and I'm facilitating it," he said. "The reality is if... they have to break the rules, they will break the rules."

A Framework Convention on Tobacco Control (FCTC), representative from Burundi, Godefroid Kamwenubusa, and a representative from the Comoros Islands, Chaibou Bedja Abdou, were both paid $3,000 (£2,000). A former representative from Rwanda, Bonaventure Nzeyimana, was paid $20,000.

The secret documents  show the company paid bribes to undermine anti-smoking legislation. In return for the illegal payment to Mr Kamwenubusa, a Burundian senior civil servant, BAT also wanted a draft copy of the country's Tobacco Control Bill. And an email from a contractor working for BAT says Mr Kamwenubusa would be able to "accommodate any amendments before the president signs".

Dr Vera Da Costa e Silva, from the WHO, said BAT "is irresponsible to say the least…It is using bribery to profit at the cost of people's lives, simple as that."