Framed as an “emergency” supplier to address an energy crisis in 1994-95, Independent Power Tanzania Ltd (IPTL) did not serve the national grid until 2002. It then became a permanent feature of the energy sector for the next 15 years. In the process, the facility burdened the Tanzania Electric Supply Company (TANESCO) with overpriced, diesel-fuelled power that was not part of the country’s “least cost” strategy, while seriously undermining the development of gas-fuelled power that was. To make matters worse, a second “emergency” project known as Richmond – later Dowans and finally Symbion – failed to address another energy crisis in 2006, and remained idle for two years after its eventual completion, while still collecting capacity charges of US$4m a month. Finally, an escrow account, set up in the central bank to hold monies owed by TANESCO to IPTL while a dispute between the two parties underwent arbitration, was paid to the new “owner” of the facility in suspicious circumstances. This led to further litigation and, in July 2017, the arrest of the principals involved on charges of fraud and criminal conspiracy.

This Briefing Note chronicles how politics and rent-seeking have subverted the development of Tanzania’s power sector during the past quarter of a century and offers tentative estimates regarding the extent of the irreparable damage caused.  

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• South-South cooperation trumps the World Bank
• The Richmond Scandal
• Enter “Escrow”
• The damage to Tanzania
• No way to do business
• Power, politics and profit
• Postscript
• Notes
• Appendix

South-South cooperation trumps the World Bank

The IPTL saga began during the presidency of Ali Hassan Mwinyi (1985-95). In 1992, the Government of Tanzania published a national energy policy [1] favouring the development of power generation using natural gas from the Songo Songo offshore field (see Appendix). Reducing dependence on unreliable hydropower and imported diesel was a key objective of this least cost expansion plan. But while the government engaged in discussions with Canadian company Ocelot to develop the natural gas project (“Songas”), it received an unsolicited proposal from Mechmar Corporation (Malaysia) to finance and build an emergency diesel-fuelled power plant to help mitigate the power-rationing crisis in 1994-95.

Like many other companies, Mechmar rode on the diplomatic coattails of Malaysian Prime Minister Mahathir Mohamed (1981-2003), who spearheaded national investments in utilities, telecoms and real estate across Africa during the 1990s, under the banner of “South–South cooperation”.[2] Despite not being in line with the government’s official least cost power strategy, Mechmar and the government signed a 20-year power purchase agreement (PPA) in May 1995. By then, the power crisis had come and gone. Meanwhile, Songas was to encounter one bureaucratic hurdle after another.

IPTL’s local partner and 30% shareholder, VIP Engineering and Marketing, a Dar es Salaam-based concern owned by Tanzanians of Asian descent, secured official endorsement for the deal. VIP director (and later owner) James Rugemalira fended off strong opposition to IPTL from within the Ministry of Water, Energy and Mineral Resources by playing the South–South card and, crucially, bribing senior officials and politicians.[3] The contract breached the government’s covenant under the World Bank-funded Power VI Project that it would not procure major power generation projects without consent. In July 1997, the Bank – the main financier of Songas[4] – suspended further support until the government dealt with the potential threat IPTL posed to the financial viability of TANESCO.

Among other things, TANESCO accused IPTL’s owners of significantly overpricing the plant and substituting cheaper medium-speed generators for slow-speed generators specified in the PPA.[5] In 1999, the dispute was taken to the International Centre for Settlement of Investment Disputes (ICSID) for arbitration. More than three years later, during which Tanzania endured further shortages of power due to the continued dependence on hydropower, ICSID finally assessed the real cost of IPTL at US$127.2m, compared to the original US$150.7m.[6] Without the tenacity of the permanent secretary at the Ministry of Water, Energy and Mineral Resources, Patrick Rutabanzibwa,[7] Mechmar would also have saddled TANESCO with substantially higher monthly capacity charges. ICSID reduced these from US$4.5m to US$2.6m a month.[8]

From 2002, instead of having a short-term emergency facility in IPTL, Tanzania was shackled for the next 15 years by an overpriced power plant running virtually full-time on imported (and overpriced) diesel fuel. The planned generating capacity of Songas was downsized and its commissioning further delayed to 2004. Even so, commissioning IPTL and Songas within two years of each other added about 40% to existing installed capacity, giving Tanzania considerably more power than it needed.[9] A further round of arbitration initiated by TANESCO on the grounds that IPTL was still overcharging, another emergency power scandal and the contested acquisition of the IPTL plant ensued. The creation of IPTL presaged what was in effect the takeover of energy planning and project development in Tanzania by private interests.

The Richmond Scandal

In 2006, just four years after IPTL began commercial operations, Richmond Development Company won a tender to generate 120 megawatts (MW) of gas-fired electricity for an investment of US$123.2m. This second emergency power supplier resembled IPTL in its excessive cost and the methods its sponsors used to subvert the project evaluation, selection and negotiation process.[10] In November 2006, the government prevented TANESCO from terminating the Richmond PPA for non-performance. By the time the Richmond plant in Ubungo was commissioned in 2007, the power shortage it had been supposed to address had passed as a result of above average rainfall. Tanzania was nevertheless legally committed to buy its power or incur penalties.

A parliamentary select committee set up in 2008 to investigate growing suspicions of malfeasance expressed in the media and the National Assembly revealed that Richmond was a shell company with no power generation experience; that the tender was fixed; and that the delays in commissioning were in large part the result of the company’s inability to finance the procurement and transport of the generators, and technical hitches with their installation. It was further revealed that Richmond had been taken over in late 2006 by Dowans Holdings, an entity based in the United Arab Emirates.[11] After the plant was commissioned, it remained idle for two years but continued to earn its owners capacity charges of about US$4m per month.

These revelations prompted the resignations in February 2008 of Prime Minister Edward Lowassa and Minister of Energy and Minerals Nazir Karamagi. But that was not the end of the fiasco. Dowans took TANESCO to arbitration at the International Chamber of Commerce and, in 2010, was awarded US$65.8m (plus interest) for breach of contract for non-payment of capacity charges. In March 2017, Symbion Power, the current owner of the plant, went to the same arbitration body to claim US$561m from TANESCO for breach of contract, power supplied and not paid for, and other monies owed.

Enter “Escrow”

Part two of the IPTL saga came to be known as “Escrow”. In 2007, TANESCO requested arbitration from ICSID for a second time, again maintaining that IPTL was overcharging for electricity. The claim was based on the failure of VIP to pay up its 30% equity stake in the company.[12] It took the best part of seven years for ICSID to reach a decision. In the meantime, capacity charges payable by TANESCO to IPTL were held in escrow at the Bank of Tanzania, in the so-called Tegeta Escrow Account (TEA). Finally, in February 2014 ICSID upheld TANESCO’s claim and instructed Standard Chartered Hong Kong – the owner of IPTL’s debt since the company had gone into receivership in 2005 – and TANESCO to agree on how much the utility had been overcharged. However, by the time the ruling was made IPTL was under new ownership and more than half of the money held in escrow had already been paid out to IPTL’s new owner, Pan African Power Solutions (PAP), owned by Harbinder Singh Sethi.[13]

Revelations of the extent of foul play involved in the transfer of ownership of IPTL to PAP and the withdrawal of funds held in the TEA filled the Tanzanian media during most of 2014. The scandal was revealed by the Parliamentary Public Accounts Committee (PAC), chaired by opposition MP Zitto Kabwe,[14] and a series of investigative articles in The Citizen newspaper. Kabwe instructed the Prevention and Combating of Corruption Bureau and the Controller and Auditor General’s Office, Tanzania’s supreme auditor, to investigate.[15]

Among other things, the public learned much about Sethi, a Tanzanian-born “tycoon” in his sixties who made his fortune in Kenya as a building contractor during the presidency of Daniel arap Moi (1978-2001).[16] He had acquired Mechmar’s notional 70% shareholding in IPTL[17] through an elaborate scheme that involved a Mechmar director, an intermediary based in the British Virgin Islands, and payment of the astounding sum of US$75m to Rugemalira for his 30% shareholding, using part of the first tranche of the TEA funds released to him.[18] To do this necessitated bribing senior politicians and government officials, regulators, judges, lawyers and bankers. Rugemalira was subsequently shown to have made payments of up to US$1m each to a long list of senior officials, including former Attorney General Andrew Chenge, a key facilitator of IPTL since its inception.[19] In late 2014, despite overwhelming evidence in the public domain of malfeasance on the part of Sethi and Rugemalira, President Jakaya Kikwete (2005–2015) in effect endorsed the looting of the TEA by settling for a few symbolic resignations and minor prosecutions.[20]

The damage to Tanzania

While IPTL has benefitted individuals connected to Mechmar, VIP and PAP, and a few senior Tanzanian politicians and government officials, the direct and indirect costs of the scam have been borne by all power consumers, actual and potential, and Tanzanians at large. Its consequences have included overpriced electricity, avoidable power crises, the subversion of planning for timely and appropriate expansion of the energy sector, and TANESCO’s insolvency. Not all are precisely quantifiable.

The box (“Direct costs of “emergency” power projects in Tanzania”) shows the direct costs to Tanzania incurred as a result of IPTL and other “emergency” power projects.

The sum of the direct costs of emergency power projects, though substantial, is almost incidental when compared to the indirect costs to Tanzania. These are harder to quantify precisely, but the order of magnitude starts to become apparent when collating relevant sources and occurrences. For example:

• According to a World Bank estimate, the cost of power outages to the Tanzanian economy in 2005 – a single year – was 4% of GDP, or nearly US$2 billion.[21]
• The price of the delay in pursuing and expanding the least cost strategy is discernible from the claim made by PanAfrican Energy Tanzania (PAET, not to be confused with PAP), the owner of Songas, that the partial use of natural gas instead of imported diesel has saved Tanzania more than US$6.2 billion since 2004.[22]
• In 2014, international donors withheld budget support worth over US$500m in protest at the Escrow scandal. Negotiations for a second US government Milennium Challenge Account grant worth US$450m, largely earmarked for power generation, were suspended. The grant was eventually cancelled over the annulled Zanzibar elections in 2015.[23]

It is even more difficult to be precise about the most significant cost of all, that of economic growth, employment and opportunities to improve welfare foregone. A more efficient, least cost power supply in Tanzania would have generated income from power sales, which could have been used to extend the grid for the benefit of commercial and domestic users alike and leverage private investment in new power plants. Instead, while big companies could install costly standby generators that mostly ran on imported diesel, countless small manufacturers and service providers were simply forced to close down.

No way to do business

A 2016 World Bank study of IPPs in five countries in sub-Saharan Africa concluded, “the lessons from Tanzania’s experience with IPTL could not be more explicit: when power is not planned and procured transparently and consistently, the implications are potentially grave, far-reaching and on-going”.[31]

Numerous surveys have reported availability and cost of electricity as major constraints on “doing business”, investor confidence and competitiveness in Tanzania. In 2006, 88% of Tanzanian firms cited inadequate electricity as a key hindrance to their operations, placing Tanzania 122nd out of 139 countries surveyed.[32] According to a report published by the government and the United States Agency for Development in 2011, “Tanzania’s well documented electricity problems [are] by far the most important infrastructure constraint to investment and economic output”.[33] A 2013 World Bank Enterprise Survey estimated power outages in Tanzania cost businesses about 15% of annual sales. In 2016, a report by CDC Group and the Overseas Development Institute found that in Tanzania and other African countries, “both GDP and formal private sector employment were closely and positively correlated with increased supply and consumption of electricity”.[34] As a result of poor planning and regulation, vested interests and the other factors described in this note, only 20% of Tanzanians have access to electricity compared to a median of 34% for sub-Saharan Africa.[35]

The World Bank and international development agencies have promoted IPPs as a means of mobilising private capital to build and manage power plants. Such arrangements have had positive results in a number of countries, including Kenya, whose power utility KenGen makes profits and distributes dividends, despite numerous cases of corruption.[36] While Kenya started developing geothermal power within a decade of its discovery, Tanzania took two decades to begin exploiting its natural gas deposits – and increasing the supply of gas to keep up with the growing demand for power is by no means guaranteed.[37]

In 2011, the government negotiated an expansion of Songas with owner PAET to meet the ever-growing demand for power. But the launch of the National Natural Gas Infrastructure Project (NNGIP) drew the policy focus away from the short-term development of Songas to long-term development of the gas sector. Not for the first time, the privately funded Songas expansion was put on hold. NNGIP included the construction of a 532km pipeline from Mtwara to Dar es Salaam, at a cost of US$1.2 billion, financed by China’s Exim Bank.[38] Completed in early 2015 the new pipeline has been functioning at a maximum 4% of capacity. The use of emergency power providers continues.

Between 2010 and 2014 new offshore deposits of natural gas were discovered, vastly increasing the extent of Tanzania’s known offshore reserves to 57 trillion cubic feet. While leading politicians and planners are pinning their hopes for economic development on the construction of a liquefaction plant, which will cost up to US$30 billion, the country’s poor regulatory record and trends in global fuel prices make it unlikely that these hopes will be realised any time soon.[39] Meanwhile, chronic gas shortages undermine the rationale for the massive planned expansion of gas-fuelled power plants.[40]

Power, politics and profit

A modest 100MW power plant should not have the potential to derail a nation’s energy policy, render its electricity utility insolvent, and trigger repeated power crises with massive knock-on effects on industrial, commercial and domestic electricity consumers. Yet that is what IPTL has managed to achieve in Tanzania since 1994. While IPTL cannot be held responsible for all the woes of Tanzania’s energy sector, it is by far the largest single cause.

The absence of robust regulatory and oversight institutions in Tanzania allowed corrupt politicians and officials to ride roughshod over formal energy planning and project management procedures. Most of the critical commentary on IPTL and subsequent Richmond and Escrow scandals have highlighted the corruption dimension. This misses the main point. Corrupt rent-seeking in public procurement and contracting is widespread in countries much more developed than Tanzania, but not all rent-seeking has equally devastating economic and financial consequences.

If one small power plant can undermine the entire energy sector and cost percentage points of GDP, then such rent-seeking has the potential to permanently compromise the entire economy, limit growth and impede employment creation. While “smart” corruption might involve taking a one-off cut on a justifiable project that is required by official policy, generates employment, is productive and contributes to government revenue, “dumb” corruption derails key national policies and imposes huge additional recurrent costs on end users, taxpayers and international donors.[41]

Postscript

On 19 June 2017, Harbinder Singh Sethi and James Rugemalira were arrested and charged with economic sabotage, criminal conspiracy, money laundering and numerous other offences. If convicted, they could face long jail terms. Their arrest was a dramatic and unexpected development, since both men had enjoyed a privileged relationship with powerful and influential figures in government, in Rugemalira’s case for almost 25 years. The charges relate specifically to Sethi’s controversial acquisition of the IPTL plant in 2013 and consequent looting of the TEA, not to the origins and negative impact of IPTL over the years.[42] Cynical observers had been arguing that President John Magufuli’s aggressive anti-corruption policy was selective in that he avoided “sensitive” issues such as IPTL and Escrow, in which his predecessors were implicated.[43] The arrest of Sethi and Rugemalira may prove the cynics wrong.

For more than three years since the Escrow scandal broke, IPTL has been able to continue reaping the spoils. It may not survive much longer. In August 2017, Magufuli ordered the Energy and Water Utilities Regulatory Authority to stop negotiations over an extension to IPTL’s contract with TANESCO.[44] Any satisfaction at this news needs to be tempered by the fundamental lesson of the IPTL saga, emergency power provision and deficient energy policy formulation in Tanzania. Namely, that the costs to the Tanzanian public far exceed the sums made by a few opportunistic rent-seekers.

Brian Cooksey is an independent consultant based in Tanzania. He has been monitoring IPTL since 1997

Notes

[1] United Republic of Tanzania (1992), The Energy Policy of Tanzania, Ministry of Water, Energy and Minerals.

[2] As chairman of the South Commission, former Tanzanian president Julius Nyerere was sympathetic to the “delinking” of Africa from Western economic domination (see South Commission (1990) The Challenge of the South, Oxford: Oxford University Press). When apprised of the nature of IPTL, however, he declared that colonialism was preferable to such “South–South cooperation.” The promoters of IPTL used anti-World Bank rhetoric to counter their critics. See Cooksey, Brian (2002) “The Power and the Vainglory: A $100 million Malaysian IPP in Tanzania” in Jomo, KS (ed.) Ugly Malaysians? South-South Investments Abused, Institute for Black Research, Durban.

[3] Evidence of bribery by Rugemalira was contained in affidavits by three government officials presented to ICSID in 1999. For details see: Cooksey (2002); and Kabwe, Zitto (2014) “How PAP acquired IPTL for almost nothing and looted US$124m from the BoT”, https://escrowscandaltz.wordpress.com/

[4] The US$266m Songas project included a 225km pipeline to Dar es Salaam, fuelling a 115MW power plant, and other engineering components. The World Bank provided US$100m, Swedish International Development Cooperation Agency (SIDA) and the European Investment Bank a further US$106m of concessional finance, and private equity investors US$60m (Gratwick, Katharine; Ghanadan, Rebecca; and Eberhard, Anton (2007) “Generating Power and Controversy: Understanding Tanzania’s Independent Power Projects”, Management Programme in Infrastructure Reform and Regulation Working Paper, Graduate School of Business, University of Cape Town). Concessional lenders and private investors changed substantially before Songas was commissioned.6

[5] Overcharging included infrastructure and staff houses that had not been constructed. There is substantial evidence that Wärtsilä, the Finnish company that built and later ran the plant, was complicit in the overcharging. See Cooksey (2002) for details.

[6] US$163m if the price of conversion from diesel to gas-firing (which was envisaged in the PPA) is included (Eberhard, Anton; Gratwick, Katharine; Morella, Elvira and Antmann, Pedro (2016:208) Independent Power Projects in Sub-Saharan Africa, Lessons from Five Key Countries, World Bank, Washington DC.

[7] Cooksey (2002) relates how Rutabanzibwa fought a losing battle against politicians over the relative merits of Songas and IPTL. During one Cabinet meeting, he unsuccessfully challenged the attorney-general’s support for IPTL. Without Rutabanzibwa’s insistence, there would probably have been no arbitration over the inflated cost of the plant.

[8] Capacity charges were calculated on the basis of the actual cost of building the plant. The PPA required the plant to be ready to provide power at short notice, failing which penalties would be incurred. The main running cost was fuel to power the generators. Both capacity charges and the cost of fuel proved contentious.

[9] Eberhard et al. (2016:208-9) “As a result, Tanzania found itself overcommitted in terms of capacity; the country needed at the most one plant, but certainly not two”. The literature is unclear on why, if IPTL plus Songas constituted excess capacity, there was another power crisis only two years after the commissioning of Songas.

[10] Richmond turned out to be a “special purpose vehicle” with no experience of power generation. The report of the Parliamentary select committee chaired by Dr Harrison Mwakyembe MP asserted that: “The proprietors of Richmond are Prime Minister Lowassa and his close friend (Igunga MP) Rostam Aziz.” Lowassa denied the claim, although he resigned. Aziz subsequently withdrew from what he termed “dirty” politics. See Tanzanian Affairs (2008) “Report on Richmond Scandal”, April.

[11] Although of unclear ownership, Dowans was shown by the committee to be represented in its Tanzanian subsidiary by Rostam Aziz, a wealthy Tanzanian businessman and ruling Chama Cha Mapinduzi party MP (1993-2011), central committee member (2006-2011) and national treasurer (2005-2007).

[12] ICSID determined in the first round of arbitration that the actual cost of the IPTL plant was US$127.2m. This was divided 70:30 between Mechmar and VIP. Mechmar’s investment consisted entirely of debt, valued at US$89.04m. VIP’s investment was the remaining US$38.16m, which the company claimed was contributed “in kind”, rather than as equity (Eberhard et al. 2016:219). TANESCO therefore argued that the monthly capital (“capacity”) charge should be revised downwards since the actual construction cost of the plant was 30% lower than the ICSID estimate. For comparison, Songas was also financed 70:30 through debt and equity, but the 30% equity was fully paid up by the private investors.

[13] See Kabwe (2014) and Policy Forum (2015 and 2017) Tanzania Governance Review 2014 and 2015-2016 for details of the controversial acquisition of IPTL and the looting of the TEA.

[14] Tanzania follows the British system of appointing opposition MPs to head the PAC. At the time a member of opposition party Chama cha Demokrasia (CHADEMA), Zitto Kabwe later resigned and founded his own party, the Alliance for Change and Transparency.

[15] The Bureau’s report was never published, probably because it implicated State House officials and relatives of Kikwete.

[16] According to the leaked Kroll Report, Sethi co-owned controversial IPP Westmont Power (Kenya) Ltd with Nicholas Biwott, a close associate of President Daniel arap Moi. Sethi was also said to manage a large property portfolio in South Africa on behalf of Moi’s son, Gideon.

[17] “Notional” since Mechmar was in receivership when Sethi acquired the shares and Standard Chartered Hong Kong purchased the debt incurred in building IPTL, as described above; see Africa Confidential (2014), “Power fraud unravels”, Vol. 55 no.19, 26 September.

[18] This payment theoretically valued IPTL at US$250m. Sethi’s total outlay to acquire Mechmar’s 70% shareholding was not more than a few million US dollars. See Kabwe (2014).

[19] See Cooksey (2002), inclduing for evidence of Chenge’s role in facilitating the official endorsement of IPTL in 1994. See also Policy Forum (2017) Tanzania Governance Review 2015–16: From Kikwete to Magufuli: Break with the past or more of the same? for evidence of Chenge’s continued collaboration with Rugemalira at the time of “Escrow”.

[20] See Table 1, Policy Forum (2016) Tanzania Governance Review 2014: The year of ‘Escrow’. In a long and convoluted speech to Dar es Salaam elders and others, Kikwete repeated the rather lame argument that the TEA money was “private” rather than “public”. The next day’s headline news was the sacking of Minister of Lands Anna Tibaijuka, a relatively minor player in the Escrow drama, although she received the equivalent of US$1m (TShs1.6 billion) from Rugemalira.

[21] Eberhard, Anton; Rosnes, Orvika; Shkaratan, Maria and Vennemo, Haakon (2011:11) Africa’s Power Infrastructure: Investment, Integration, Efficiency, World Bank, Washington DC.

[22] The Citizen (2017) “Relief as Tanzania saves Sh14tr by extracting Songo Songo gas”, 10 August; The Guardian (2017) “Songo Songo gas project prevails over operational hitches to deliver innumerable benefits and savings”, 15 August.

[23] In 2008, the Millennium Challenge Corporation and the Government of Tanzania signed a five-year US$698m compact to finance roads, power and water supply.“

[24] Eberhard et al. (2016:202-210).

[25] BBC News (2011) “Power firm Aggreko wins £23m Tanzania contract”, 22 June.

[26] Eberhard et al. (2016: 217).

[27] Tanzania Invest (2017) “Symbion power claim US$561m to Tanzania Electric Power Company”, 29 March.

[28] Law360 (2017) “ICSID pauses enforcement of US$148m award against Tanesco”, 13 April.

[29] Bloomberg (2016) “Tanzania power issues casts shadow on $12 billion debt plan”, 16 February.

[30] Eberhard et al. (2016:202).

[31] Eberhard et al. (2016:91).

[32] World Economic Forum survey, cited in World Bank (2013:102) Enterprise Survey: Tanzania.

[33] Governments of the United Republic of Tanzania and the United States of America (2011:102) Tanzania Growth Diagnostic: Partnership for Growth. CDC and Overseas Development Institute (January 2016:1) “What are the links between power, economic growth and job creation?”, Development Impact Evaluation Evidence Review: “in Tanzania and other African countries both GDP and formal private sector employment were closely and positively correlated with increased supply and consumption of electricity”.

[34] CDC/ODI op.cit.

[35] Kojima, Masami and Trimble, Chris (2016) Making Power Affordable for Africa and viable for its utilities, World Bank, Washinton DC; Eberhard et al. (2016) claims that Tanzanian access to power is about average for sub-Saharan Africa.

[36] For a comparison between TANESCO and KenGen, see Policy Forum (2016: Chapter 4); also Daily Nation (2015) “Increased power sales sees KenGen post Sh11.5bn net profit”, 14 October.

[37] Daily News (2015) “Kenya’s geothermal overtakes hydro before completion of plant”, 22 October.

[38] Opposition MP Zitto Kabwe claimed there was massive corruption involved in the pricing of the pipeline.

[39] “Tanzanian LNG, which has already suffered delays relating to land acquisition and regulatory uncertainty, may slip further down the lengthy waiting list of… LNG project(s).” See The East African (2017) “Uncertainty clouds Tanzania gas investment as low prices persist”, 23–29 September. See also Policy Forum (2015:54-56) Tanzania Governance Review 2013: Who will benefit from the gas economy, if it happens”.

[40] Eberhard et al. (2016:213) lists planned state-owned and public-private partnership gas-powered projects costing over US$1.4bn to generate 1,240MW of electricity.

[41] This is an important distinction that helps explain why some countries – China, for example – develop rapidly despite widespread corruption.

[42] Cooksey, Brian (2017) “Focus should now turn to IPTL, they created Escrow”, The East African, 24 June

[43] IPTL was conceived during the “second phase” government of President Ali Hassan Mwinyi, commissioned during President Benjamin Mkapa’s decade in power (1995–2005) and survived intact, including Escrow, under President Jakaya Kikwete (2005–2015).

[44] Daily News (2017) “IPTL’s licence extension flops”, 31 August.

Appendix

The post IPTL, Richmond and “Escrow”: The price of private power procurement in Tanzania appeared first on Africa Research Institute.

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On 30 October 2016, Ivorians will vote on adopting a new draft constitution unveiled only 25 days earlier. Very few citizens have read the text, which a committee of experts drew up and parliament rapidly endorsed. The government maintains that its priority has been to ensure that the new constitution is “consensual” and “impersonal”.[1] This would be novel in a country where the basic law has been shaped by the personal interests of one Frenchman and three Ivorians.

Constitution-making in Côte d’Ivoire has been characterised by subjective notions of national priorities and eligibility for leadership. It has shown a fixation with power and authority. There has never been a meaningful attempt to consult citizens, let alone reach a consensus. In the absence of a coherent or credible opposition, and despite the evident need for national dialogue and reconciliation, Ivorians have been deprived of a serious debate. This is a missed opportunity, but it should not come as a surprise. This Briefing Note situates the 2016 constitutional review in its historical context; and highlights contested features of a new basic law that, although dispensing with exclusionary language, is an elite project.
[message_box title=”SUMMARY” color=”none”] [list type=”bullet”]

• Le général français
• Papa Houphouët
• Le dauphin
• Le général ivoirien
• Succession in Côte d’Ivoire’s Third Republic
• Article 35, the Senate, the diaspora and the chiefs
• My constitution

Côte d’Ivoire’s first constitution bears the imprint of a French military officer born some 5,000km away. On 13 May 1958, an attempted putsch in Algiers led to a cabinet crisis in Paris. General Charles de Gaulle agreed to lead a government of national unity on condition that he be granted emergency powers and a new constitution be drawn up. This, he insisted, must establish a powerful presidency, to bring an end to the instability which had characterised the Fourth Republic (1946–58) in France.

De Gaulle’s new basic law was approved by popular referendum on 28 September 1958. In France’s African colonies this was coupled with provisions for gradual decolonisation. In advance of the plebiscite, de Gaulle travelled to Abidjan, convincing Ivorians to vote “yes” and join the Communauté française in preparation for independence.[2] On 26 March 1959, the territorial assembly transformed itself into a constituent assembly and adopted an interim constitution modelled on the Gaullist statute. The first parliament was elected on 12 April 1959, its members (députés) assuming greater responsibilities than the conseillers territoriaux who preceded them. The Parti démocratique de Côte d’Ivoire (PDCI) won all the seats in the new legislature and PDCI leader Félix Houphouët-Boigny became prime minister.
[quote]Houphouët-Boigny was steeped in the legal and political turmoil of the Fourth Republic and the Gaullist authoritarianism that followed. [/quote] Although not a Gaullist, Houphouët-Boigny had strong ties to metropolitan France. For 13 years, he represented Côte d’Ivoire in the National Assembly in Paris and served as a minister in five French governments. Houphouët-Boigny contributed to drafting the 1946 basic law as a member of two constituent assemblies; and he served on the inter-ministerial committee de Gaulle consulted on the 1958 constitution.[3] Houphouët-Boigny was steeped in the legal and political turmoil of the Fourth Republic and the Gaullist authoritarianism that followed. Following Côte d’Ivoire’s independence on 7 August 1960, he swiftly moved to emulate the Gaullist model and centralise power in the Ivorian presidency. Houphouët-Boigny would occupy this position for 33 years, 30 of them without a prime minister.

Papa Houphouët

Côte d’Ivoire’s 1960 constitution repeated verbatim much of France’s 1958 document.[4] Regardless of the grand principles articulated in the preamble, in practice citizens who wished to take part in politics had to join the PDCI – which provided all the members of the first four parliaments. Together with the party’s political bureau, Houphouët-Boigny handpicked candidates for the legislature, seeking to reward loyalty and minimise opposition. The president adroitly managed political competition, co-opting opponents and recycling elites through party, government and parliamentary offices.
[quote] Houphouët-Boigny remained wary of allowing any individual to emerge as his heir apparent, making constitutional succession a highly contentious issue. [/quote] While firmly controlling the political space, Houphouët-Boigny liberalised the economy and promoted agricultural production, leading to a sustained period of growth. Much of this was driven by an influx of migrant labour from Upper Volta (now Burkina Faso) and Mali to the north. Workers were attracted to Côte d’Ivoire by a policy that in effect determined that anyone who would put it to productive use could occupy fertile land. As in the colonial era, land laws overrode customary tenure, inadvertently sowing the seeds of conflict between “indigenous” Ivorians and “northern” migrants (who, although not citizens, were entitled to vote). Houphouët-Boigny’s decision to retain French nationals in the civil service and state-owned enterprises, and to permit Lebanese businesses to flourish, added to growing xenophobia.

Houphouët-Boigny remained wary of allowing any individual to emerge as his heir apparent, making constitutional succession a highly contentious issue. In 1967, Houphouët-Boigny announced his intention to appoint a vice-president, but the plan was never realised. For two decades, he entrusted control of the legislature to Philippe Yacé. Serving concurrently as president of the National Assembly and PDCI secretary-general, Yacé was viewed as a likely heir. In 1975, the cabinet declared that the head of the parliament would assume the presidency should the incumbent die in office. However, five years later Houphouët-Boigny again announced his intention to name a vice-president, without disclosing who he intended to appoint.

Le dauphin

At the PDCI’s seventh congress in October 1980, the president abolished Yacé’s position of party secretary-general and replaced it with an executive committee. In November that year, Yacé was also removed as head of the National Assembly. His successor was former finance minister Henri Konan Bédié. That November 1990, Houphouët-Boigny confirmed that Bédié, as president of the National Assembly, would assume the duties of head of state ad interim if the role became vacant. However, to check Bédié’s power the president amended the constitution to appoint the first prime minister since independence, Alassane Dramane Ouattara. A former Africa director at the International Monetary Fund (IMF) with roots in the north of the country, Ouattara was tasked with implementing major structural reforms.

For ten months during 1992–93, Houphouët-Boigny was hospitalised in Europe and many of the duties of head of state fell to Ouattara. Bédié’s National Assembly condemned the prime minister’s attempts to privatise state-owned enterprises, inflaming antipathy between “sons of the soil” and “northerners”. In line with the constitution, however, the Supreme Court named Bédié interim president following Houphouët-Boigny’s death on 7 December 1993. Ouattara resigned as prime minister and returned to the IMF in Washington, DC.

Bédié took advantage of his incumbency to amend the electoral law, aware that Ouattara might defeat him if he returned to contest an election, given the latter’s support among the large voting bloc of “northerners”. Henceforth, candidates for the presidency had to be resident in the country and provide evidence that all four of their grandparents had been born in Côte d’Ivoire. Ouattara’s family was scattered across both sides of the border and he had completed his secondary education in Upper Volta. The legal emphasis that Bédié ensured was placed on ivoirité – an exclusionary concept of national identity which stressed the primacy of ethnic indigeneity – in effect eliminated his main competitor from the presidential election on 22 October 1995. It also fomented ethnic hatred and precipitated xenophobic attacks on northerners, dividing the country that Houphouët-Boigny had endeavoured to build.

Le général ivoirien

A bloodless military coup on 24 December 1999 initially provided hope for those suffering the damaging effects of ivoirité. Junta leader Gen. Robert Guéï promised to “sweep the house clean”, declared a state of emergency and tasked a commission with organising elections and drafting a new basic law. 27 experts synthesised the recommendations of several hundred civil society representatives. However, personal ambition again trumped the national interest. Faced with the same electoral predicament as his predecessor, Guéï resorted to incorporating the principle of ivoirité in the proposed constitution, further formalising the exclusion of “northerners” and entrenching animosity.

The new basic law was adopted by popular referendum and promulgated on 1 August 2000. Article 35 stated that candidates for the presidency must be “of Ivorian origin, born of a father and a mother of Ivorian origin”. The president of the National Assembly remained the constitutional successor if the incumbent died in office, while the prime minister was responsible for forming a government.

On 6 October, a newly appointed Supreme Court disqualified 14 of the 19 candidates for the presidency, including Ouattara and Bédié. When initial results from the polls went against Guéï, he dissolved the electoral commission and declared himself the winner. Supporters of his main adversary, Laurent Gbagbo, a university lecturer-cum-trade unionist and leader of the Front populaire ivoirien (FPI), took to the streets. When the army deserted him, Guéï fled the country, enabling Gbagbo to take power. Ouattara and his supporters called for a new ballot that would include all the candidates excluded by Guéï’s “kangaroo court”. Gbagbo refused.

Opposition from Ouattara’s party, Rassemblement des Républicains (RDR), initially made it impossible to hold legislative elections in the north of the country. With the RDR boycotting the polls, Gbagbo’s FPI took 96 of the 225 parliamentary seats and Bédié’s PDCI 94. When the RDR agreed to contest subsequent municipal elections, the party won 63 councils, ahead of the PDCI on 60 and the FPI on 33. Amid such divisions, a military rebellion in September 2002 instigated a protracted civil war between “northerners” resentful of their exclusion from power and forces loyal to the FPI-led government.
[quote] Faced with the same electoral predicament as his predecessor, Guéï resorted to incorporating the principle of ivoirité in the proposed constitution, further formalising the exclusion of “northerners” and entrenching animosity. [/quote] In January 2003, the signing of the Linas-Marcoussis Accord provided for the removal of divisive and exclusionary ivoirité provisions from Article 35. However, Gbagbo delayed elections until October 2010, perhaps conscious that he faced a formidable opponent. Ouattara’s RDR and Bédié’s PDCI had united under the banner of the Rassemblement des houphouëtistes pour la démocratie et la paix (RHDP). Like Guéï before him, Gbagbo refused to accept electoral defeat in a run-off election held on 28 November. A dubious ruling from the politicised Conseil constitutionnel provided a pretext to disregard results in Ouattara’s strongholds.[5]

More than 3,000 Ivorians were killed before Gbagbo was forcibly removed from the presidential palace on 11 April 2011. It was captured by “northern” rebels with support from the French army. Ouattara was inaugurated as president on 6 May and invited Guillaume Soro, a former rebel leader and prime minister under Gbagbo, to form a government. Following legislative elections on 11 December, Soro was appointed president of the National Assembly and thus became the heir apparent. While Soro continues to serve at the pinnacle of the Ivorian state, Gbagbo is being tried for crimes against humanity at the International Criminal Court in The Hague. This has led to accusations of victor’s justice.

Succession in Côte d’Ivoire’s Third Republic

Ouattara is eager to stress his commitment to peace and reconciliation. In March 2015, he promised that if he was re-elected that October, he would revise the basic law to clarify succession and formalise the electoral calendar. The push for constitutional reform has been framed as delivering on the Linas-Marcoussis Accord – a document endorsed by the United Nations Security Council.[6] In this regard, Ouattara is on shaky ground: the agreement commits its signatories to revise rather than replace the statute.

The distinction has not escaped the attention of either the FPI or the PDCI. The former has split into two factions in Gbagbo’s absence, while the latter is visibly divided over Bédié’s willingness to serve as a junior partner to Ouattara. Conscious of the predominance of subjectivity or “personal preferences” in the history of constitution-making in Côte d’Ivoire, civil society representatives have  also urged Ouattara to revise controversial parts of the existing text – such as Article 35 – rather than become embroiled in writing a new document.[7] Nevertheless, the president has shown his intention to emulate the Gaullist model, which treats constitutional reform as an elite project rather than an opportunity for dialogue and consensus.

In May 2016, Ouattara appointed a committee of experts led by Prof. Boniface Ouraga Obou. A former dean of the law faculty at the University Félix Houphouët-Boigny in Cocody, Abidjan, and ex-member of the Conseil constitutionnel, Ouraga Obou is a founding member of the FPI who presided over the body responsible for the 2000 basic law. Ouattara’s proxy in the process has been Dr Cissé Bacongo, a special adviser who was also involved in the 2000 constitutional review. The whole process is supported by Minister of Justice Sansan Kambilé, a former judge and government secretary-general. Following consultation with 40 stakeholder groups, the committee delivered a draft constitution to the president on 24 September. The text was put before the cabinet on 28 September and parliament on 5 October.
[quote] Regardless of the imperfections of the new dispensation, the current succession provision is far from perfect either. [/quote] Not everyone in the government has welcomed the review process. Soro initially continued to refer to “reforms to the constitution” rather than a new constitution. The introduction of a vice-president, who would be able to complete the term of the incumbent in the event of his death – and thus “guarantee the continuity and stability of the executive and ensure that the electoral calendar is respected”[8] – could be seen as diminishing the status and authority of the president of the National Assembly.

The vice-president is to be elected on a joint ticket with the head of state from 2020, but under an interim dispensation Ouattara is entitled to appoint a deputy when he promulgates the new basic law. That Ouattara has already expressed a desire to stand down before 2020 has led to criticism that he is attempting to install a successor by the back door.[9] The appointment of a vice-president would have greater legitimacy if parliament were involved, a point stressed by the Plateforme de la société civile pour l’observation des élections en Côte d’Ivoire (POECI)[10] and members of parliament.[11]

Regardless of the imperfections of the new dispensation, the current succession provision is far from perfect either. While the president of the National Assembly is able to fill a power vacuum temporarily, the requirement to organise elections within 45 to 90 days is ambitious. Given the history of incumbents amending electoral laws and manipulating institutions, it is by no means certain that Soro, a former rebel leader, would respect the constitution. Having so far been insulated from any legal repercussions for his role in the civil war, he might prefer to benefit from the immunity afforded to a sitting head of state.

Article 35, the Senate, the diaspora and the chiefs

Those intent on contrasting the 2000 basic law with the 2016 document point to evidence of the subjectivity that is typical of constitution-making in Côte d’Ivoire. They argue, for example, that Bédié (aged 82) and Ouattara (aged 74) have good reason to support a reduction in the number of conditions dictating eligibility for the presidency from 12 to four. They cite the removal of a maximum age limit of 75, and the lowering of the minimum age threshold from 40 to 35 years. Yet this was precisely the wording agreed at Linas-Marcoussis in 2003, when Soro was only 30.[12] A less frequently heard criticism concerns the omission of a requirement for medical reports on presidential aspirants. These were an integral part of Article 35 of the 2000 constitution, whereas the Linas-Marcoussis Accord only required the incumbent to make details of his annual medical checks public.

Appropriating wording from the peace agreement, presidential candidates will no longer be required to prove that both their parents were Ivorian, and that they had never renounced Ivorian citizenship or assumed another nationality. Nor will they have to have been resident in Côte d’Ivoire for five consecutive years before the election. This could be regarded as advantageous to Gbagbo, who has been held in The Hague since November 2011. Curiously, the FPI has fixated on a clause from the 2000 constitution, which required that any changes to the presidential mandate be put to a single-issue popular referendum, seemingly oblivious to the fact that these provisions entrenched the exclusionary tactics first implemented by Bédié, expanded by Guéï, and maintained by Gbagbo.
[quote] Attempts to engage the diaspora in domestic politics may help to heal old wounds and promote a diversity of views. [/quote] FPI politicians inside and outside the country may also fail to appreciate the steps being taken to provide them with a means to influence legislation. The absence of the party from the National Assembly following their boycott of the 2011 elections has been addressed in Ouattara’s plans to create a new Senate (upper house). Two-thirds of the new body will be indirectly elected by Côte d’Ivoire’s collectivités territoriales (14 districts and 31 regions), which should provide those in less densely populated areas with a greater voice than in the National Assembly. The remaining 33 senators are to be appointed by the president, who may pick from among “Ivorians outside the country and members of the political opposition”.

Attempts to engage the diaspora in domestic politics may help to heal old wounds and promote a diversity of views. Issiaka Konaté, director-general for Ivorians outside the country, told ARI that “Article 30 entitles the diaspora to participate in national affairs. Under the Third Republic, I hope that Ivorians abroad will be considered the 32nd region”. On paper, bicameral parliaments also provide opportunities to promote a greater role for under-represented groups, such as women, youth and the disabled, to influence legislation. This would be constructive in a country where 77% of the population is under 35 years old and where women play a limited role in political life.

However, Ouattara may resort to using the Senate as Houphouët-Boigny did the National Assembly. Plans for Bédié’s PDCI and Ouattara’s RDR to merge, formalising the RHDP alliance under a new party, are supposed to be realised before legislative elections, due by December 2016. With competition for selection on an RHDP ticket expected to be fierce, those who lose out in primary elections are likely to seek a consolation prize in the upper house, either by popular ballot or presidential appointment. Ouattara has an incentive to maintain a friendly parliament. Under new rules, the head of state would be able to suggest amendments to any part of the basic law, subject to a two-thirds majority in a plenary session of the National Assembly and Senate.

The additional parliamentarians will not be the only new “big men”. Ouattara plans to enshrine in the constitution a “National House of Traditional Chiefs and Kings”, emulating Ghana. Both Ouattara and Houphouët-Boigny were born into royal households and have used tribal leaders for political advantage. Mamadou Koulibaly, a former president of the National Assembly, argues that institutionalising chiefs would lead to jurisdictional disputes with municipal government.[13] In contrast, Gilles Yabi of West African think tank WATHI believes that a house of traditional leaders “could play an important part in promoting national unity, provided that its role, function and composition is clearly specified.”[14]

Had Ivorians been consulted on the drafting of a new basic law, chiefs could have convened debates in rural communities. The RHDP coalition may yet enlist traditional leaders in a belated attempt to educate villagers on the proposed constitution and cajole them into voting in the plebiscite. Turn-out is unlikely to be strong. POECI argues that rural folk do not view changes to the statute as pressing; more urgent priorities are national reconciliation, the rising cost of living, unemployment and security.”[15]

My constitution

Marie-Joelle Kei, co-ordinator of the West African Network for Peacebuilding–Côte d’Ivoire has called for the constitutional referendum to be delayed until early 2017, to allow time for greater popular participation.[16] Even RDR activists have expressed a lack of preparedness for the campaign.[17] By any standards the timetable is rushed and does not attest to profound deliberation. Many Ivorians will undoubtedly regard the new basic law as another presidential project.

Ouattara remains determined to get the vote out of the way and loath to provide a disparate opposition with a political cause behind which to unite. Initial calls for a constituent assembly made good sense, and might have offered the opportunity for inclusive deliberations over the text. But the opposition’s willingness to engage in rational debate became questionable when 23 parties resolved to reject the constitution before the text was released.
[quote] By any standards the timetable is rushed and does not attest to profound deliberation. Many Ivorians will undoubtedly regard the new basic law as another presidential project. [/quote] Many of those who have spoken out against the new basic law have done so because they remain loyal to Gbagbo and refuse to acknowledge the legitimacy of the Ouattara regime. Opposition politicians have described the proposed constitution as “treacherous”,[18] and “undemocratic, illegal and illegitimate.”^[19] Despite its ethos of exclusion, they maintain that the 2000 document is “progressive, modern and avant-garde”;[20] and that the government’s attempt to overhaul it risks provoking “a new socio-political crisis” and poses a “threat to peace and stability.”^[21] One group has even vowed to “block Ouattara’s path.”[22]

Such hyperbole and reactionary behaviour does nothing to promote reconciliation or dialogue over issues of national importance. Ouattara’s decision not to open up the process may be a result of the recalcitrant nature of the opposition, but he has also displayed a preference for the Gaullist model. Anyone familiar with the history of constitutional reform in Côte d’Ivoire should not be surprised that the most recent version of the basic law has been fashioned by the incumbent in the absence of popular consultation.

NOTES

[1] “Remise de l’avant-projet de constitution: allocution de SEM Alassane Ouattara, Président de la République de Côte d’Ivoire”, Government of Côte d’Ivoire, 24 September 2016,

[2] Established in 1958 as the successor to the Union française, the Communauté française comprised France and her overseas departments and territories, as well as a number of former colonies.

[3] “L’élaboration de la Constitution de 1958: entretien avec Michel Debré”, France TV, 15 October 2012

[4] Robert E. Handloff (ed.), Côte d’Ivoire: A Country Study, Library of Congress, Third Edition, 1991, p.145

[5] The Conseil constitutionnel is a replica of that in France’s 1958 constitution. It should be completely autonomous from the legislative and executive branches, and play a role in regulating them; however, in practice the institution has been politicised, employing legal arguments to endorse exclusionary policies.

[6] Resolution 1464 (2003) adopted by the Security Council at its 4,700th meeting on 4 February 2003

[7] “Côte d’Ivoire/La convention de la société civile ivoirienne pour une révision constitutionnelle et non une réforme”, Agence Ivoirienne de Presse, 30 September 2016

[8] “Cérémonie d’ouverture de la deuxième session ordinaire de l’Assemblée nationale: allocution de SEM Alassane Ouattara, Président de la République de Côte d’Ivoire”, Government of Côte d’Ivoire, 5 October 2016

[9] Cyril Bensimon, “Côte d’Ivoire: le président Ouattara promet une nouvelle Constitution s’il est réélu”, Le Monde.fr, 23 October 2015

[10] “Avant-projet de Constitution, des avancées notables mais des clarifications sur certaines dispositions”, POECI, 8 October 2016, pp.8–9

[11] Vincent Duhem, “Côte d’Ivoire: que faut-il retenir des débats sur la Constitution?”, Jeune Afrique, 8 October 2016

[12] “Texte de l’Accord Linas-Marcoussis”, France Diplomatie, 24 January 2003

[13] S. Debailly, “Côte-d’Ivoire ‘Constitution Ouattara’: Koulibaly critique Ouattara et annonce sa participation au sit-in au Parlement”, Connection Ivoirienne, 3 October 2016

[14] Gilles Olakounlé Yabi, “Côte d’Ivoire: la nouvelle constitution proposée par le président Ouattara est une occasion manquée”, WATHI, 10 October 2016,

[15] Tié Traoré, “Référendum 2016/Une enquête révèle: 2 Ivoiriens sur 3 rejettent l’adoption d’une nouvelle Constitution”, L’inter, 16 August 2016

[16] Armelle Nga, “Un groupe d’ONG appelle à un report du référendum en Côte d’Ivoire”, AfricaNews.com, 17 September 2016

[17] David Yala, “Un cadre du RDR prévient Ouattara: ‘Des militants du RDR ne sont pas prêts à aller voter Oui au référendum”, Linfodrome.com, 13 October 2016,

[18] “Côte d’Ivoire: Marche contre la constitution, Affi N’guessan promet de combattre jusqu’au bout ‘la dictature Ouattara”, Koaci, 8 October 2016

[19] “Côte d’Ivoire: 23 partis d’opposition contre le projet de nouvelle Constitution”, RFI, 30 June 2016

[20] David Gone, “Côte d’Ivoire/nouvelle constitution: Aboudrahamane Sangaré et le FPI décident enfin”, Afrique Sur 7, 10 October 2016

[21] “Côte d’Ivoire: 23 partis politiques rejettent le projet de révision de la constitution ivoirienne”, Abidjan.net,  30 June 2016

[22] “Le parti de Blé Goudé ‘opposé’ au projet de la nouvelle Constitution ivoirienne”, Abidjan.net, 25 September 2016

The post Constitution-making in Côte d’Ivoire appeared first on Africa Research Institute.

Municipal elections have had a brief and unremarkable history in post-apartheid South Africa. However, the polls on 3 August are expected to be the most fiercely contested of any to date. South Africa’s demography is changing rapidly and with it the political landscape. The eight largest city councils – known as metropolitan municipalities, or “metros” – are home to some 40% of the population, where the share of the vote held by the ruling African National Congress (ANC) is in decline.

Amid the clamour for votes, ANC infighting and heated rhetoric, little attention has been paid to the state of the country’s municipalities. Local governments are responsible for R250 billion of expenditure a year, equivalent to 8% of GDP.[1] Their impact on the daily lives of most citizens is far greater than that of the national administration. The ANC may well lose control of one or more of the seven metros it holds. In the absence of a clear winner, coalitions may be required to govern four of them. Yet, in pursuit of radically different electoral constituencies, the country’s three main political parties have adopted seemingly incompatible approaches to governance. This Briefing Note examines the backdrop to an election that is likely to be a watershed in South Africa’s democratic development.

• The struggle (to be heard)
• Comrades for the council
• Shifting constituencies
• Technocrats in the town hall
• Left out
• Revolutionary councillors
• Crossing the Rubicon
• Sources

The struggle (to be heard)
On 3 August, 26.3 million citizens will be eligible to vote – 42.5% more than registered for municipal elections in 2000. However, participation in electoral politics has declined: 18.7 million South Africans cast ballots in the 2014 national and provincial polls, equivalent to 57% of the voting age population, down from 72% in 1999.[2]

A remarkable 48.6% of the electorate have come of age since the end of apartheid in 1994, but young people remain disproportionately under-represented. While 93% of South Africans over 40 are registered to vote in local elections, this figure falls to 79% among those aged 30–39, and to 55% for those aged 20–29.

The diminishing appeal of electoral politics can in part be explained by the dominance of the ANC, seemingly invincible with more than 60% of the vote in 2014. Flagging support for the party’s leader, Jacob Zuma, is another factor. The president has been embroiled in a succession of corruption scandals, and the compatibility of his style of leadership with the tenets of a constitutional democracy is widely – and volubly – questioned. Justice Malala, a prominent political commentator, recently cast Zuma as “a sexist, homophobic, crass, incapable and shameless man who has handed over important and prominent cabinet posts to his friends… With him have come patronage and mediocrity.”[3]

Lack of accountability has also caused disillusionment and apathy. South Africans do not directly elect the head of state, who is appointed by parliamentary ballot. The legislature is elected by proportional representation (PR), with the result that members of parliament (MPs) serve at the behest of powerful parties, owing their position to a ranking on a PR list. In the case of municipal government, voters cast ballots for both a ward councillor and a party; yet parties can recall councillors in both categories. In a 2015 survey, two-thirds of voters stated that they had no access to ward councillors or knew how to reach them.[4] Radical activism is eclipsing electoral politics.

In 2014, 218 “service delivery protests” were recorded in South African municipalities, ranging from the blockading of roads to destruction of government buildings.[5] Received wisdom has it that such protests tend to peak in non-election years, and dissipate when MPs and councillors attempt to resolve community grievances in return for support at the ballot box. However, violent protest linked to political battles within the ANC have marked June and July 2016. Electoral competition is becoming ever fiercer.

Comrades for the council
With over one-quarter of South Africans unemployed, and many more having given up looking for work, election to municipal office is a prized opportunity. Such roles “can mean the difference between being middle class and being unemployed”, asserts Steven Friedman, director of the Centre for the Study of Democracy at the University of Johannesburg.[6] They are also lucrative. A part-time representative in the smallest municipality (grade 1) can be paid as much as R207,455 a year. A full-time committee chair in a grade 1 municipality could earn R482,357, while in a grade 6 council, this could rise to R877,968. The mayors of the eight metros are entitled to up to R1,242,409 – more than the starting salary of an MP.[7]

Councillors are entrusted with access to resources, power and influence. They are responsible for determining how contracts are awarded. “Tenderpreneurs” use political connections to obtain contracts, often in return for a kickback to the party or individuals. Paul Graham, southern Africa director at Freedom House, a democracy and rights watchdog, told ARI that “using public office for personal gain has become normalised under the Zuma administration”. The practice of “cadre deployment” – providing the politically connected with salaried positions in government – is commonplace.

ANC Secretary-General Gwede Mantashe has admitted that the battle for patronage and competition between “tender beneficiaries” contributed to pre-election violence in Tshwane, a Gauteng province metro which encompasses the administrative capital Pretoria.[8] A factional conflict between supporters of incumbent mayor Kgosientso “Sputla” Ramokgopa and ANC Deputy Chair for Tshwane Mapiti Matsena could not be resolved and risked derailing the party’s campaign in the metro. The ANC’s decision to parachute in Thoko Didiza – a figure disconnected from local politics – exposed the priority afforded to internal dispute resolution.[9]

Tshwane also highlighted the shortcomings of ANC “slates”. This form of block voting has been standard practice since the party’s Polokwane conference in December 2007, which hastened the recall of Thabo Mbeki as president of South Africa. The zero-sum nature of factional battles has precipitated an increase in the use of violence. In KwaZulu-Natal (KZN) and Mpumalanga provinces individuals overlooked in candidate selection have orchestrated political assassinations, with the intention of forcing a by-election or moving up a PR list.

An estimated 450 political assassinations occurred in KZN between 1994 and 2014.[10] During the past two years, 64 people have been killed at Glebelands Hostel in Durban, in what “started as a fight over the allocation of beds but has escalated into an intra-ANC strife”.[11] Twelve ruling party cadres were executed in KZN in June-July 2016.[12] The alarming statistics for Zuma’s home province raise questions about the ANC’s ability – and desire – to maintain law and order there.

In Mpumalanga, violence has also become a feature of politics. An ANC deputy chairman, Michael “Zane” Phelembe, was shot dead outside his home in May. He had opposed plans regarding the award of lucrative local infrastructure deals. As violent contestation has escalated, ideological divides within the ruling party have seemingly disappeared. Raymond Suttner, a former anti-apartheid activist who now lectures at Rhodes University, contends that there has been “a broader depoliticisation of the ANC as the drive for spoils displaces political ideas.”[13]

Shifting constituencies
Policy debates may be a thing of the past, but the ANC knows how to put on a show for voters. The party enlists prominent musicians to play at “car washes” where election candidates dispense T-shirts, posters and alcohol before touring local shebeens and hairdressers. In economically marginalised areas, the opportunity to receive handouts is attractive. While nationally only one in four South Africans say they attended an election campaign rally in 2014, in Mpumalanga the figure was 48%. The ANC received 78.8% of the provincial vote.

This type of electioneering comes at a cost. South Africans have come to expect an increase in corruption ahead of elections as state coffers are looted by those charged with fundraising. During a May 2016 visit to London, Dr Zweli Mkhize,  ANC national treasurer and KZN “kingmaker”, joked that he was looking for donations as “the cost per vote keeps going up!”. In a 2015 Afrobarometer survey, the majority of respondents agreed with the statement that “voters are bribed”, with 27% feeling this occurred invariably and 28% occasionally.[14]

Besides its access to resources, the ANC has a trump card: identity politics. In April 2016, Zuma told a rally in Melmouth, KZN, “We have a problem as black people. Some people don’t even go out there and vote. Every elderly white person goes out there to vote because they know how important voting is.”[15] Ebrahim Fakir, manager of governance institutions and processes at the Electoral Institute for the Sustainable of Democracy in Africa, told ARI that “playing the race card may provide the ANC with a quick win, but this tactic is not sustainable in the long term.”
 
In the meantime, ANC figures at all levels routinely refer to its major opponent, the Democratic Alliance (DA), as a “white party”. The threat posed by the DA has increased since it began targeting the black middle class. The party’s share of the vote in urban areas increased from 17.9% in 2004 to 30.2% in 2014, largely thanks to support from young professionals. StatsSA estimates that the proportion of South Africans living in towns and cities is 62% and rising. While rural turnout decreased from 77.6% in 2004 to 69.9% in 2014, in urban areas it marginally increased.[16]

Urban workers played an instrumental role in bringing the ANC to power, through the United Democratic Front. This incorporated the labour movement, churches, civil society and student activists, and adopted the ANC’s Freedom Charter, co-operating with the Congress of South African Trade Unions (COSATU) and the underground South African Communist Party (SACP). However, the ANC’s share of the urban vote has declined significantly, from 66.8% in 2004 to 55.8% in 2014. In a 2015 opinion poll, only 42% of city dwellers said they would vote for the ruling party.[17]

Conscious of its declining national support, the ANC moved to capture a political constituency held by the Inkatha Freedom Party in KZN.[18] In 1999, only 11% of the ANC’s national vote came from the province, compared to 24% from Gauteng. In 2014, KZN and Gauteng both accounted for 22% of the party’s national vote. The ANC also controls every municipality in the predominantly rural provinces of Free State, Limpopo and Mpumalanga. Prof. Ivor Chipkin, executive director of the Public Affairs Research Institute has observed that, “The ANC is becoming a regional, ethnic party.”[19]
 
To that charge, can be added one of systemic corruption. Irregular expenditure by South Africa’s municipalities more than doubled between 2010-11 and 2014-15, when it reached R14.75 billion. During the same period, fruitless and wasteful expenditure increased from R273 million to R1.34 billion.^[20] The auditor general only has the power to report on the worsening situation, not to remedy it. That responsibility falls to elected officials, but even where the political will exists, municipalities often suffer a skills shortage. In 2014, the Department of Cooperative Governance and Traditional Affairs reported that 170 of 278 municipal chief financial officers did not hold qualifications appropriate for their role.[21]
 

Technocrats in the town hall

Exploiting these failings, the DA has promised “honest government”. Its campaign has stressed the party’s record in Western Cape, where it runs the province and the City of Cape Town, and governs two-thirds of the municipalities. In 2014-15, 73% of Western Cape municipalities were awarded clean audits. The DA cultivates a reputation for “doing things by the book”. The party runs, either alone or in coalition, nine of the 10 top-ranked municipalities in the Government Performance Index.[22]

Through “Blue the Network”, the DA has appealed to “young professionals wanting to bring about meaningful change in South Africa”. This has enabled it to recruit new members and a pool of prospective candidates with experience of business and finance. Applicants are interviewed and tested prior to selection, then provided with relevant training. This focus on skills contrasts with the fierce – and sometimes physically violent – competition that characterises ANC primaries.

However, the DA remains hamstrung by its perceived lack of diversity. Although technically the most representative of South Africa’s political parties, the shortage of older black males in the party leadership is notable. The party’s Young Leaders Programme promotes diversity across the DA, and has introduced under-35s from all racial backgrounds into party structures, local and provincial government, and parliament – but it will take time to change entrenched perceptions.

The DA has put up candidates for the 2016 municipal elections in every single ward in the country, a feat unmatched by the ANC. However, 45% of its representatives are standing for multiple positions, despite election to one office alone being permissible by law. The DA is also accused of an urban bias. Nkanyiso Gumede of the Institute for Poverty, Land and Agrarian Studies (PLAAS) has observed that the party’s manifesto contains “absolutely nothing on agriculture, rural development, land reform or farm workers, raising the question of whether or not the DA recognises that there is a large rural constituency.”[23]

Mmusi Maimane, the DA’s 36-year-old leader, is a gifted orator and “media savvy”. His decision to refer government maladministration to the public protector (an ombudsman) and the courts has proved effective. But sustained attempts to call a vote of no confidence in Zuma, despite the ANC’s huge parliamentary majority, attest to an interest in seeking headlines. Appeals to the government to raise social grants – a range of welfare payments that the ANC initiated – at a time when the national budget is under intense pressure, displays a degree of political opportunism. The enthusiasm for the social grant system and the party’s endorsement of the National Development Plan has prompted debate about whether the DA is merely “ANC Lite”. Winning a metro in Gauteng, or Nelson Mandela Bay in Eastern Cape, would put this suggestion to the test.

Left out
The ANC, COSATU and the SACP maintain a “Tripartite Alliance”, but this is fracturing amid controversy over Zuma’s clientelism. The Communist Party has talked up “state capture” and promised a “mass action” campaign against members of the Gupta family, who have allegedly profited from personal ties to Zuma, but has stopped short of directly criticising the head of state. Ranjeni Munusamy, associate editor at the Daily Maverick, told ARI that the Young Communist League wants the SACP to field its own candidates in future elections.

In public, COSATU endorses the ANC but its credibility is diminished. “COSATU has lost muscle”, Munusamy told ARI, stressing its declining membership amid a shift away from the shop floor and towards public sector jobs. The mining sector used to constitute the labour federation’s largest affiliate until more urgent, radical voices eclipsed ANC-linked unions. Wildcat strikes in August 2012, and the massacre of striking workers at the Lonmin mine in Marikana, saw the rise of the independent Association of Mineworkers and Construction Union at the expense of the National Union of Mineworkers.

In November 2014, in another significant development, COSATU expelled the National Union of Metalworkers of South Africa (NUMSA). When Zwelinzima Vavi, then COSATU’s general secretary, spoke out against the expulsion, he too was dismissed. Vavi and NUMSA’s general secretary, Irvin Jim, plan to form a new labour federation, unionising hitherto marginalised workers and appealing to those in the informal sector.

That Vavi and Jim have not yet made their move is testament to the growing presence of the Economic Freedom Fighters (EFF) since the party’s formation in July 2013. Although the EFF achieved only 6.4% of the national vote in April 2014, it won representation in all nine provinces and became the official opposition in two provincial legislatures, Limpopo and North West. The party is untested at local level, but its widely anticipated success could be the headline of the 2016 municipal elections.
 

Revolutionary councillors
The rise of the EFF can be attributed to the personality of its leader and the appeal of his populist narrative and dress code. Julius Malema, the party’s “commander-in-chief”, is a former ANC Youth League leader who once pledged to die for Zuma. Malema has since become a thorn in Zuma’s side, describing him as “an illegitimate president”, “morally and politically compromised”, and calling for his “immediate removal” in response to the 2016 state of the nation address. [24]

Malema has branded the EFF as a party of the working class, the neglected and the marginalised. It has gained a foothold in constituencies disaffected with the ANC, including the “unhitched” labourers whose precarious existence has not changed since the apartheid era. The party’s powerful, racially charged discourse on land appeals to those living in townships and backyard shacks. Its uniform – red overalls and hardhats, interchanged with military fatigues and red berets, or pinafores – is distinctive, and its conduct calculated to attract attention. Numerous EFF MPs have been forcibly removed from the parliamentary chamber for rambunctious behaviour. The EFF has also tapped into the spirit of rebellion among black students at South Africa’s universities. Party activists buttressed the #RhodesMustFall movement, and subsequently #FeesMustFall, wrong-footing the ANC Youth League.

Casual labourers are unlikely foot soldiers for an election campaign, but the party has actively sought to represent their interests nevertheless. The EFF manifesto demands that all companies listed on the Johannesburg Stock Exchange pay a minimum wage of R4,500. Those employed in specific manual roles would be entitled to additional salaries. Mineworkers would receive R12,500 per month; private security guards, R7,500; builders, R7,000; factory workers, R6,500; and petrol attendants, cashiers and farm labourers, R5,000.[25] The manifesto also promises to “expropriate and allocate land equitably to all residents of the municipality”. Africa Check found this proposal to be unworkable in the absence of ministerial approval and funds for compensation.[26] Similarly impractical is a pledge that half of all goods sold in the municipality would be produced locally.

The EFF finds itself at a critical juncture. It must now decide whether it is to be an entertaining  protest movement or a party willing and able to govern. If it has sufficient councillors to hold the balance of power in a municipality, it will be presented with an opportunity to access paid positions and influence resource distribution. Should it refuse to join a coalition, it could lose support and be portrayed as politically irrelevant. If it accepts, the EFF will be expected to dispense more than populist bombast.

Malema has done all he can to distance himself from the party that spawned him. In June, he told a crowd in Bushbuckridge, Mpumalanga, “You are in an abusive relationship with the ANC. It beats you up and you go back and say you love it.”[27] Despite his claims that the EFF “will never work with the ANC”, some suspect Malema of planning a return to the  fold once he has shown his ability to garner more than 10% of the vote.

Crossing the Rubicon
South Africa’s political landscape is increasingly pluralistic. Each election now brings a more concerted challenge to the unrivalled supremacy that the ANC has enjoyed since 1994. The 2016 municipal elections will confirm as much. Fewer than one in three South Africans of voting age are likely to turn out to support the ANC on 3 August. Traditional supporters may engage in tactical voting – splitting their votes across ballots for ward and PR councillors – in the hope of electing a candidate with the inclination to fix dilapidated local infrastructure and the nous to improve municipal finances.

Should the ANC lose control of one – or more – of its seven metros, there will be immediate and intense speculation about the party’s ability to dominate the April 2019 national and provincial elections. There is already conjecture that, faced with the prospect of losing Gauteng province in 2019, the ANC may “self-correct”, recalling the president at the next national conference in December 2017. But Zuma’s grip on power is entrenched. All the provincial premiers remain loyal to him, and many others depend on his patronage. Against the backdrop of rapidly changing demography, some regard his close ties with rural constituencies as an electoral bulwark rather than an existential threat to the ANC.

Political pluralism, at least in South Africa’s cities, is synonymous with increasing divergence. The character and approach of the parties being watched most closely – the ANC, DA and EFF – could not be more different. Where coalitions become necessary after 3 August, they will have to be negotiated and fashioned by those advancing disparate and incompatible policy prescriptions to local and national issues. This process will produce important insights into the near-term development of democracy in South Africa.

At the 2011 municipal elections, when 57.6% of registered voters turned out, the DA was the major beneficiary of a heightened interest in local politics.[28] In 2016, the EFF may profit from widespread frustration at the state of government. It remains to be seen whether technocrats and revolutionaries can collaborate in government, but the opportunity to revitalise South Africa’s maligned municipalities is theirs for the taking.

Interviews were conducted in April 2016. Africa Research Institute and Nick Branson would like to express their gratitude to those who contributed.

[1] At the time of publication, 100 South African Rand was equivalent to US$7

[2] Collette Schulz-Herzenberg, “Trends in electoral participation and party support: 1994-2014”, Institute for Strategic Studies, www.issafrica.org/uploads/Electoral-Trends-Collette-Schulz-Herzenberg.pdf

[3] Justice Malala, “The Big Read: Lousy Hlaudi, get off TV”, The Times, 4 July 2016, www.timeslive.co.za/thetimes/2016/07/04/The-Big-Read-Lousy-Hlaudi-get-off-TV

[4] “‘We will see them when it is election time’”, Africa in Fact (Issue 36; March–April 2016), p.110

[5] Derek Powell, Michael O’Donovan and Jaap de Visser, “Civic Protests Barometer 2007-2014”, Multi-Level Government Initiative, University of the Western Cape, February 2015, http://dullahomarinstitute.org.za/multilevel-govt/mlgi/civic-protests-barometer-2007-2014/view

[6] Troye Lund, “Local government reform: Pravin’s big challenge”, Financial Mail, 11 December 2014, www.financialmail.co.za/coverstory/2014/12/11/local-government-reform-pravins-big-challenge

[7] “Determinations of upper limits of salaries, allowances and benefits of Members of Municipal Councils”, Independent Commission for the Remuneration of Public Office-Bearers, 21 December 2015, www.remcommission.gov.za/pebble.asp?relid=4381

[8] Krista Mahr, “Violent South Africa protests expose ANC internal rifts”, Financial Times, 22 June 2016, www.ft.com/cms/s/0/ce8382f6-388c-11e6-9a05-82a9b15a8ee7.html#ixzz4CQW5s3EG

[9] Natasha Marrian, “How the ANC is balancing factions and competence”, Business Day, 21 June 2016, www.bdlive.co.za/national/2016/06/21/news-analysis-civic-choices-show-anc-balancing-factions-and-competence

[10] David Bruce, “Political killings in South Africa”, Policy Brief 64, October 2014, Institute for Security Studies, https://www.issafrica.org/uploads/PolBrief64.pdf

[11] Nce Mkhize, “The hostel where locals feel like refugees”, Business Day, 30 June 2016, www.bdlive.co.za/national/2016/06/30/the-hostel-where-locals-feel-like-refugees

[12] Genevieve Quintal, “Another ANC KwaZulu-Natal leader killed, bringing death toll to 12”, Rand Daily Mail, 19 July 2016, www.rdm.co.za/politics/2016/07/19/another-anc-kwazulu-natal-leader-killed-bringing-death-toll-to-12

[13]  Raymond Suttner, “Op-Ed: Tshwane’s flames and disintegration of ANC’s authority”, Daily Maverick, 29 June 2016, www.dailymaverick.co.za/article/2016-06-29-op-ed-tshwanes-flames-and-disintegration-of-ancs-authority

[14] Sibusiso Nkomo and Jamy Felton, “As South Africa’s local elections approach, public confidence underpins system in turmoil”, Afrobarometer, 17 May 2016, http://afrobarometer.org/publications/ad89-south-africas-local-elections-approach-public-confidence-underpins-system-turmoil

[15] “I am your president and shepherd, let me lead you – Zuma”, News 24, 3 April 2016, www.news24.com/SouthAfrica/News/i-am-your-president-and-shepherd-let-me-lead-you-zuma-20160403

[16] Jonathan Faull, “Slicing and Dicing the 2014 Election Data: What are the implications for the ANC, DA and EFF?”, Institute for Security Studies, 29 May 2014, www.issafrica.org/uploads/2014-Election-Data-Judith-Februrary.pdf

[17] Sibusiso Nkomo and Jamy Felton, “As South Africa’s local elections approach, public confidence underpins system in turmoil”, Afrobarometer, 17 May 2016, http://afrobarometer.org/publications/ad89-south-africas-local-elections-approach-public-confidence-underpins-system-turmoil

[18] Nick Branson, “Land, Law and Traditional Leadership in South Africa”, Briefing Note, Africa Research Institute, 17 June 2016, http://bit.ly/SALandLaw

[19] Ivor Chipkin, “Once-invincible ANC takes on regional, ethnic colours”, Sunday Times, 15 May 2016, www.timeslive.co.za/sundaytimes/opinion/2016/05/15/Once-invincible-ANC-takes-on-regional-ethnic-colours

[20] Paul Berkowitz, “Local government audits 2013-14: how well are we doing with Clean Audit 2014?”, 3 June 2015, http://paulberkowitz.co.za/local-government-audits-2013-14-how-well-are-we-doing-with-clean-audit-2014/

[21] Lukhona Mnguni, “Grassroots grievances”, Africa in Fact (Issue 36; March-April 2016), p.67

[22] “GGA Government Performance Index 2016”, ibid., p.91

[23] Nkanyiso Gumede, “Scramble for votes: Are rural votes vital in the upcoming local government elections?” PLAAS, 12 May 2016, http://www.plaas.org.za/blog/scramble-votes-are-rural-votes-vital-upcoming-local-government-elections

[24] “SONA: Transcript of Julius Malema’s speech”, PoliticsWeb, 24 February 2016, www.politicsweb.co.za/documents/sona-transcript-of-julius-malemas-speech

[25] Economic Freedom Fighters, “EFF memorandum to Johannesburg Stock Exchange”, 27 October 2015, http://effighters.org.za/eff-memorandum-to-johannesburg-stock-exchange-27-october-2015/

[26] Kate Wilkinson and Masutane Modjadji, “Is the EFF your ‘last hope for service delivery’? We evaluate their manifesto”, Africa Check, 26 May 2016, https://africacheck.org/reports/is-the-eff-your-last-hope-for-service-delivery-we-evaluate-their-manifesto/

[27] Sam Mkokeli, “Exclusive: Inside the mind of Julius Malema”, Financial Mail, 15 June 2016, www.financialmail.co.za/coverstory/2016/06/15/exclusive-inside-the-mind-of-julius-malema

[28] Ebrahim Fakir and Waseem Holland, “Changing voting patterns?” Journal of Public Administration (Volume 46, Number 3.1), September 2011

The post South Africa’s watershed elections: Awry, the Beloved Country? appeared first on Africa Research Institute.

La croissance des grandes villes d’Afrique est si rapide que les gouvernements centraux et municipaux s’en trouvent accablés. Il y a un manque de planification stratégique ; des lacunes dans la prestation de services de base aux résidents s’élargissent de plus en plus. Depuis les années 90, une décentralisation généralisée a beaucoup fait pour transférer la responsabilité de l’urbanisation aux autorités locales, alors qu’elles ne reçoivent qu’une part modique du revenu intérieur avec laquelle elles doivent s’acquitter de leurs responsabilités.1 Certaines autorités municipales – diligentes et proactives – sont en train d’étudier des moyens pour améliorer la génération des revenus ainsi que les possibilités de diversifier les sources de financement. Selon le contexte légal et réglementaire, l’appétit des investisseurs, ainsi que la solvabilité des emprunteurs et des projets d’investissement proposés, les obligations municipales seraient peut-être un mécanisme de financement valable pour certaines capitales d’Afrique. Ce Briefing Note décrit la tentative de la Ville de Dakar, capitale du Sénégal, de lancer la première obligation municipale de l’UEMOA (l’Union économique et monétaire ouest-africaine), tout en évaluant les répercussions du blocage de cette initiative par le gouvernement central.

• Capitale contestée
• Confusion de pouvoirs
• Les investissements de Dakar
• Faire son marché
• Dakar évaluée… puis bloquée
• Financer l’urbanisation de l’Afrique
• Sources

Capitale contestée

Pendant les années 2000, le Président Abdoulaye Wade cherchait à promouvoir Dakar en tant qu’une destination importante d’investissements. Un vaste programme de construction avait créé alors des routes, des centres commerciaux, des hôtels, ainsi que des créations plus controversées : le Monument de la Renaissance africaine, la Porte du Millénaire… En 2008, Dakar a accueilli le Sommet de l’Organisation de la Conférence Islamique (OCI). Commencent alors des travaux pour créer un nouvel aéroport international. La grande vision de Wade évoquait celle du Président Léopold Sédar Senghor, faisant écho aux années 60.

La plupart des Dakarois ne voyaient pas les avantages de cette nouvelle infrastructure. « Les routes ne se mangent pas » affirmait-on souvent à Dakar, ville où seulement une personne sur cinq trouvait un emploi à temps plein. La pénurie chronique d’emplois et de logements abordables, émeutes de la faim, services de transports inadéquats et embouteillages, inondations, gestion erratique des déchets, conduites d’égout cassées, pannes de courant fréquentes… Tels sont les traits de l’« autre » Dakar. En ce qui concerne les bidonvilles et les colonies de squatters où vivent 40 % de la population – ainsi que dans de nombreuses zones d’entreprises et de logements formels – l’Etat reste largement inefficace. Pour Amadou Diop, professeur de géographie, les « caractéristiques clés » de sa ville seraient « la croissance effrénée, l’occupation désorganisée et déséquilibrée des terres, une crise manifeste, et un environnement en déclin ».2

En 2009, Khalifa Sall du Parti Socialiste a été élu Maire de Dakar, délogeant alors un allié de Wade. Sall a promis d’améliorer la ville – surtout pour les habitants les plus défavorisés – et de garantir une plus grande participation du public dans les affaires de la ville. Réélu en 2014, Khalifa Sall était vu comme le porte-drapeau de la participation active des gouvernements locaux à travers l’Afrique, en tant que secrétaire général de l’Association internationale des maires francophones (AIMF) et président de Cités et gouvernements locaux unis d’Afrique (CGLUA). En 2012, Dakar a accueilli le Sommet Africités, la réunion triennale de CGLUA qui rassemble des milliers d’experts et de fonctionnaires venus des quatre coins du continent. D’ailleurs, Khalifa Sall a insisté sur l’adoption d’une Charte africaine du gouvernement local, tout en exigeant la création d’un Conseil supérieur de l’union africaine des autorités locales. Aux yeux de Sall, il fallait que ce soient les plus proches de la population – c’est-à-dire, les autorités locales – qui constituent le moteur du développement favorable aux défavorisés, sinon celui-ci ne se réalisera jamais.

Dakar est depuis longtemps le champ de bataille principal où s’affrontent des intérêts commerciaux et politiques. Par exemple, au début du mandat du maire, entre son administration et Wade éclate un conflit a éclaté sur la gestion des déchets dans la capitale. En cas d’inondations, l’on discute invariablement la responsabilité de remédier aux dégâts. Si Khalifa Sall et le président actuel, Macky Sall, se sont unis pour renverser Wade, et que les deux ont souvent exprimé leur volonté de collaborer pour le bien de Dakar, ils restent quand même des adversaires politiques. Lorsque les partis politiques s’affrontent, comme au cours des élections locales de 2014, cette rivalité est d’une pertinence primordiale. Dans la perspective du rythme et de l’efficacité du développement de la capitale du Sénégal, le programme de décentralisation joue un rôle également important.

Confusion de pouvoirs

Le Code des Collectivités Locales du Sénégal (1996) a été élaboré dans le but d’apaiser les adversairespolitiques du gouvernement d‘Abdou Diouf, président alors depuis 1981. Cette législation prévoyait le transfert de pouvoirs considérables aux autorités locales dans le cadre de la décentralisation et de la dévolution. La loi promouvait d’ailleurs la participation citoyenne et la planification régionale. Sa rhétorique s’appuyait sur le principe de subsidiarité, pour rapprocher le gouvernement de la population. Qui plus est, l’article 58 de la loi 96-07 dispose que nulle fonction ne doit être transférée aux autorités locales sans le transfert de ressources adéquates, provenant de recettes de certains impôts, de subventions, sinon des deux. Dans le cas de Dakar, il n’en a jamais été ainsi. L’Etat refuse, de manière systématique, de transmettre les fonds aux municipalités : à celles surtout entre les mains de l’opposition. Des transferts financiers erratiques, arbitraires, manquant de transparence, font partie intégrale de la décentralisation sénégalaise et décrédibilisent gravement l’objectif déclaré.

A Dakar, la prédominance continue de l’Etat trouve son incarnation administrative dans le préfet du département de Dakar – nommé par le gouvernement – et son incarnation fiscale dans le percepteur, qui constitue le comptable externe de la ville. Ces deux individus ont les pouvoirs nécessaires pour intervenir dans l’administration de la ville, ainsi que la capacité de la superviser. En revanche, la Ville de Dakar ne dispose d’aucun mécanisme qui oblige le gouvernement central à payer ses dus. Mises en place par l’Etat, plusieurs initiatives visant à augmenter les finances des autorités locales ont échoué. Pour la période de 2008-2012, la moyenne annuelle des indemnités versées à la Ville de Dakar – apparemment pour financer les fonctions que lui transférait la décentralisation – représentait la somme modique de 322 millions FCFA (650 000 $US)3 , soit moins de 1 % du budget municipal.

Sans le transfert régulier des ressources auxquelles elle a légalement droit, la Ville de Dakar n’est pas en mesure de s’acquitter de l’ensemble des responsabilités – importantes, d’ailleurs – qui lui sont dévolues.4 Les possibilités d’augmenter les ressources en améliorant la perception locale de revenus sont limitées parce que la fiscalité est hautement centralisée. Si la Ville a réussi à augmenter ses propres recettes de presque 40 % dans la période de 2008–2012, elle ne contrôle que moins de 10 % du total de ses revenus, qui proviennent pour la plupart de frais perçus pour les pancartes publicitaires. Après vingt ans, la décentralisation n’a pas encore apporté ce qu’elle avait promis au début aux résidents de Dakar.

Le cadre de la décentralisation crée un chevauchement important des systèmes de gouvernement local et national. Alors que leurs relations au quotidien se caractérisent par l’harmonie, il se produit fréquemment une « confusion de pouvoirs » qui complique et qui contrecarre la planification et l’administration locales. Des ambiguïtés dans la définition des responsabilités respectives forment un obstacle de taille à une collaboration plus efficace entre les gouvernements central et municipal à Dakar.

Les investissements de Dakar

Khalifa Sall s’était promis que le conseil municipal devrait prouver sa crédibilité quant à la compétence de son administration, que les limites financières ne réduiraient pas le conseil à l’inaction. « Dès le début, nous avons pris la décision d’investir les ressources de la Ville – telles qu’elles étaient – dans toutes les fonctions dont nous sommes responsables : les fonctions sociales, culturelles, sportives, et autres », nous a affirmé le maire.6 Parmi les premières initiatives dans le cadre de l’éducation, on comptait un programme de distribution de lait, des uniformes scolaires gratuits et des ordinateurs pour les écoles primaires, et des examens médicaux gratuits – chaque année – pour les enfants. Et dans le cadre des grands programmes de travaux publics, appuyés par le programme des « bénévoles dakarois » visant les jeunes sans travail, on a entrepris par exemple l’amélioration du revêtement des routes et le désensablement du centre-ville.

Sall a cherché des fonds de toutes parts. Dans le but d’accéder aux prêts et à d’autres fonds externes, Dakar avait été évaluée dans le cadre d’un examen du programme « Dépenses publiques et responsabilité financière » (PEFA) : cela l’a aidé dans sa mission.7 Première entité sous-nationale à se faire évaluer dans ce programme, la performance de la Ville de Dakar était mixte. Selon l’examen, Dakar « [n’avait] pas de programme de réformes, encore moins de programme pour gérer les finances publiques »8 L’on a souligné des insuffisances dans la planification et dans les prévisions. Cependant, cet examen PEFA a initié certaines améliorations : par exemple, dans la comptabilité, l’on publiera par la suite les audits et les évaluations.

Des réformes ont permis à Dakar de faire des emprunts. En 2008, l’Agence Française de Développement a fait un prêt concessionnel de 10 millions d’euros (16 millions $US) sur 20 ans pour améliorer l’éclairage des rues. Avec Sall à la barre, on a aussi accordé des prêts commerciaux : 3,6 milliards FCFA (7,2 millions $US) venus d’Ecobank pour reconstruire un marché au centre-ville ; de la Banque Islamique du Sénégal, un prêt de 2,1 milliards FCFA (4,1 millions $US) sur trois ans pour des feux de circulation ; et de la Banque Ouest-Africaine de Développement, 9,7 milliards FCFA (19,5 millions $US) pour la réfection des routes et des places de parking. A ce jour, le service de la dette et les remboursements de prêt s’effectuent à temps.

« L’expérience des investissements dans les feux de circulation, les routes, les chaussées, nous a beaucoup appris », dit Khalifa Sall. « Nous avons décidé, après, d’entreprendre un programme pour réduire réellement la pauvreté. » On a planifié d’importants investissements dans une zone commerciale de 10 ha à Petersen, à l’extrémité nord de la municipalité de Dakar-Plateau. Dans une stratégie de réorganisation du centre-ville, l’on a prévu un nouveau marché de 13 milliards FCFA (26 millions $US) pouvant abriter au moins 4 000 des marchands ambulants et commerçants de Dakar. Démarche controversée, le maire avait interdit le commerce de rue – après de nombreuses séances de consultation auprès des associations de commerçants pour leur expliquer ses projets et pour entendre leurs objections. Malgré l’objectif de « réduire la pauvreté », visant d’ailleurs les marchands de rue, les relations entre les autorités et les marchands ambulants restent volatiles, parfois même acrimonieuses.

Le regroupement des marchands ambulants du centre-ville dans un seul endroit avait un atout supplémentaire : la décongestion du Plateau et de la partie la plus au sud de la péninsule. Selon la Banque Mondiale, la congestion routière à Dakar, aggravée par le commerce de rue, coûterait 108 milliards FCFA (216 millions $US) en perte de revenus, chaque année. En diminuant sa dépendance financière au gouvernement central, le programme visait d’ailleurs à générer des revenus dont la ville avait grand besoin. Le défi consistait à trouver les fonds nécessaires : 20 milliards FCFA (40 millions $US). En 2012, les revenus d’exploitation de Dakar s’élevaient à 36,5 milliards FCFA (73 millions $US) ; ses dépenses en capital étaient de l’ordre de 11 milliards FCFA (22 millions $US).

Faire son marché
 
C’est dans le contexte d’une immense agitation politique – la course aux élections présidentielles 2012 – la course aux élections présidentielles 2012 – que Sall établit ses projets. « D’un jour à l’autre, le maire ne savait pas s’il allait être jeté en prison [par Wade], ou si les maires seraient tous abolis », affirme Khady Dia Sarr, directrice du « Dakar Municipal Finance Programme » (DMFP), équipe constituée au sein du bureau du maire et composée de quatre cadres sénégalais et d’un expert externe.9 Malgré la possibilité de sources alternatives, l’émission d’une obligation municipale comportait des attraits indéniables. Elle permettrait à la Ville de Dakar d’emprunter une somme importante sous forme de montant forfaitaire, à un taux inférieur à celui des emprunts commerciaux. Elle serait d’ailleurs le signe de sa détermination à ne pas dépendre des financements concessionnels, ainsi que la preuve de sa confiance dans ses capacités à gérer er des investissements générateurs de recettes. Selon Dieynabo Dabo, la coordinatrice du DMFP, les préparatifs de l’émission d’une obligation représentaient « un processus tout nouveau » pour le maire, le DMFP, et toute l’administration municipale. « Personne ne savait au juste ce qu’il fallait faire. » Ayant finalisé ses projets au mois de mai, le DMFP a été lancé officiellement en septembre 2012.

Dans la plupart des pays d’Afrique, les entités sous-nationales n’ont pas droit aux emprunts. Peu nombreuses sont les municipalités pouvant établir leur solvabilité en fonction des flux de trésorerie, un profil d’endettement, ou des antécédents de crédit suffisants pour dissiper les craintes des investisseurs concernant les remboursements. Rares sont celles pouvant démontrer des antécédents adéquats de planification stratégique, de gestion des dettes, ou d’administration compétente. A cet égard, Dakar ressemblait à la plupart des capitales d’Afrique. Ses revenus auto-générés, comme ses ressources, étaient réduits ; son budget dépendait énormément du gouvernement ; ses capacités techniques restaient limitées. En revanche, après l’examen PEFA, la Ville avait établi une Direction de la Planification et du Développement Durable (DPDD) capable de démontrer que Dakar avait une stratégie de développement crédible ; de plus, elle pouvait faire preuve d’une gestion des dettes compétente.

Les préparatifs de l’émission d’obligations municipales sont d’une importance primordiale. Vue la méfiance des membres des services de planification, d’administration, et de finances municipaux, il fallait qu’ils se sentent pleinement consultés et intégrés dans le processus. Dans ce but, l’on a institué un nouveau conseil consultatif englobant la société civile, des représentants des entreprises, des chefs religieux. L’on a mis en œuvre un nombre d’initiatives visant une professionnalisation de l’administration de la ville et une amélioration de l’expertise : du DPDD, pour approfondir le plan stratégique de Dakar ; de la Direction Générale des Finances, pour maximiser la perception des recettes ; de la Direction du Développement Urbain, pour aider à la conception et à la construction du projet d’investissements.

Il fallait aussi savoir comment s’y prendre avec le cadre réglementaire : il était nécessaire que l’obligation respecte les exigences de l’autorité émettrice, le Conseil Régional de l’Épargne Publique et des Marchés Financiers (CREPMF) de l’UEMOA, dont le siège est à Abidjan (Côte d’Ivoire). Au début de 2014, une équipe de la Banque Mondiale a fait le suivi de l’examen ; elle a donné des conseils à la Ville sur la mise en œuvre d’améliorations supplémentaires dans la gestion des recettes fiscales. La réussite d’une émission dépend d’un projet d’investissements crédible, des communications proactives, et du choix du bon moment.

Dakar évaluée… puis bloquée
 
Dès le début, l’on a demandé à l’agence de notation internationale Moody’s de fournir une cote de crédit confidentielle pour la Ville de Dakar. Pour ce faire, l’on a évalué par exemple son aptitude à prendre des décisions, la qualité de sa planification budgétaire, sa gestion des actifs et des créances, ainsi que la prévisibilité de ses revenus. Cette cote servirait de repère permettant de mesurer les améliorations éventuelles avant l’obtention d’une notation publique, officielle. Vu que l’obligation serait lancée dans le marché régional de l’UEMOA, c’est une agence régionale de notations – Bloomfield, basée en Côte d’Ivoire, agréée par le CREPMF – que l’on a choisie à cette fin.

En septembre 2013, après un réexamen rigoureux de ses finances, durant trois mois, Dakar a reçu une notation A3 à court terme et une notation BBB+ à long terme. Une telle cote de qualité (« investment-grade ») aurait suffit à justifier l’émission de l’obligation, selon les directives du régulateur ; cependant, la Ville a aussi fixé une garantie partielle de 50 % du montant principal de l’obligation de la part de l’Agence des Etats-Unis pour le développement international (USAID) pour augmenter encore plus la solvabilité de la transaction. « Le rehaussement de crédit de la part d’un garant éminent tel que l’USAID a dissipé certaines des inquiétudes concernant les défaillances dans les pires des cas », affirme Jeremy Gorelick, principal conseiller financier et technique du DMFP.

La Ville ayant reçu sa notation, il était possible de structurer l’obligation. Le montant de l’emprunt a été fixé à 20 milliards FCFA (40 million $US), à rembourser sur une période de sept ans. L’on a proposé un taux d’intérêt annuel de 6,6 %. Pendant les deux premières années, aucune partie du montant principal de l’emprunt ne serait remboursable ; cependant, l’USAID avait stipulé un fonds de réserve pour financer les premiers remboursements. Une compagnie dakaroise a été chargée d’organiser la commercialisation et le placement de l’obligation par l’entremise de 18 intermédiaires financiers parmi les huit pays de l’UEMOA. En janvier 2015, après les retards provoqués par les élections locales de 2014, le lancement de l’obligation sur la Bourse régionale des valeurs mobilières d’Abidjan, était imminent. La couverture médiatique commence alors, de même que le forum itinérant pour investisseurs. La demande des investisseurs aurait été forte ; en février, le CREPMF émit le visa autorisant l’émission de l’obligation.

Deux jours avant le jour du lancement officiel, le ministère de l’économie et des finances a suspendu l’avis de non-objection qu’il avait accordé au projet en juillet 2014. Il a souligné certaines « objections techniques », ce qui a bloqué l’émission de l’obligation. Dès lors, se soulèvent des questions, des doutes concernant : le niveau d’endettement de la Ville ; la responsabilité de l’Etat, en cas de défaillance, pour la moitié de l’émission non couverte par l’USAID ; l’appartenance politique du promoteur immobilier, bénéficiaire potentiel de la construction de la nouvelle zone à Petersen ; la légalité de l’émission au regard de l’Acte III de la décentralisation. Le 5 mars, CREPMF retire le visa autorisant l’obligation.

Khalifa Sall déclarera que rien n’avait changé depuis la décision du gouvernement permettant l’entreprise du processus. Le préfet et le percepteur – nommé par le ministère de l’économie et des finances – avaient approuvé la légalité budgétaire et générale de l’émission. Bien des alliés du maire voyaient le blocage comme une attaque ad hominem contre lui. Lors des élections locales de 2014, il avait battu la première ministre, Aminata Touré, candidate nommée par le gouvernement pour le déloger et s’assurer le contrôle de la capitale. Ayant gagné son deuxième mandat de maire, la possibilité qu’il mène une campagne présidentielle contre Macky Sall se révélait plus probable : l’influence de la politique nationale sur la gestion de la capitale sénégalaise se voyait confirmée de nouveau.

Financer l’urbanisation de l’Afrique

A ce jour, la rapide urbanisation ne constitue pas un moteur clé de la croissance économique en Afrique subsaharienne. Elle se caractérise par : la prolifération de bidonvilles non planifiés et dénués de services essentiels ; l’explosion du chômage chez les jeunes ; l’escalade dans la dégradation et les risques environnementaux. En général, les projets du gouvernement ne tiennent pas compte de la grande majorité des résidents de la plupart des grandes villes, ni de leur activités économiques informelles, dont dépend un avenir plus prospère. Il existe une insuffisance chronique de financement urbain.

Selon une étude de 2012, le déficit d’investissements municipal d’Afrique aurait été de 25 milliards $US chaque année : « Malgré ce besoin pressant, la plupart des gouvernements locaux d’Afrique ont un accès restreint aux marchés des capitaux et ne disposent pas de finances du secteur privé pour les infrastructures. »10 La diversification des finances est d’une nécessité urgente. Les grandes villes d’Afrique ne peuvent plus vivre en dépendant d’indemnités inadéquates du gouvernement central ou de financements concessionnels (par donation) qui sont limités. Une plus grande autonomie financière est essentielle. Le rôle primordial des gouvernements locaux dans la réalisation des Objectifs de Développement Durable (ODD) a été reconnu dans le Programme d’Action d’Addis Ababa de 2015 ; en octobre 2016, ce rôle sera souligné au sommet mondial Habitat III.

Dakar a fait preuve d’une approche innovatrice devant ses exigences de financement. Dirigée par un maire dynamique, compétent, la tentative de faire d’importants investissements pro-pauvres, générateurs de revenus, financés par une obligation municipale, a beaucoup de leçons à enseigner à d’autre villes. Le DMFP était bel et bien une initiative locale. Les préparatifs de l’émission obligataire n’ont pas nécessité une armée de technocrates externes ; il a suffi d’un noyau d’administrateurs municipaux compétents, appuyés si nécessaire par des institutions externes de financement du développement. Il a fallu que certains services municipaux améliorent l’exécution de quelques fonctions de base : la planification, la communication, la collaboration ont servi dans ce but. En amenant la Ville au point de lancer son obligation, le DMFP a aussi souligné le potentiel du renforcement des finances municipales en Afrique.

Il y a une grande marge d’amélioration dans l’administration fiscale par ou au nom des villes, dans la génération des recettes, et dans le contrôle des coûts. Par exemple, à Dakar, l’administration municipale a facilement amélioré la collecte inefficace du gouvernement central des recettes locales, en vertu d’une entente de partage de revenus ; les impôts fonciers restent gravement négligés comme source de revenus municipaux.11 Les marchés obligataires régionaux existants constituent les bases de l’émission obligataire municipale et étatique pour les investisseurs africains en monnaies locales. Toutefois, il serait possible de les renforcer à l’aide d’une industrie de notation de crédit intérieur qui soit plus développé, plus abordable. Un développement du cadre réglementaire des marchés obligataires régionaux entraînerait une hausse dans la confiance des investisseurs, pour favoriser la mobilisation intérieure de plus nombreux actifs financiers d’Afrique.

Les ressources humaines et économiques de l’administration municipale de Dakar n’excèdent pas celles de la plupart des capitales africaines. Ses antécédents financiers n’étaient pas parfaits. Or, la Ville a réussi à construire un argument convaincant de sa solvabilité et à élaborer une transaction bancable qui dépassait de loin les ratios standard du service de la dette pour municipalités. Ces facteurs, avec la garantie de l’USAID, ont attiré un groupe d’investisseurs prêts à s’y engager. En décembre 2014, le DMFP a reçu le Prix Guangzhou, établi en 2012 par l’CGLUA et la ville de Guangzhou. Le projet de Dakar était le seul de l’Afrique parmi les 259 entrées soumises.

A  l’image de bien de capitales, Dakar se compose en fait de deux cités. C’est la volte-face du gouvernement central, au dernier moment, qui a bouleversé l’émission de l’obligation : ce qui souligne que Dakar est un prix politique farouchement disputé, tout en constituant le centre tristement sous-financé et le cœur de l’activité économique du Sénégal. Cette dualité représente une barrière importante au développement socio-économique de beaucoup de capitales du monde. Cependant, en Afrique, la nécessité de la contourner est particulièrement pressante. Pour que l’urbanisation devienne un moteur du développement, il faudra prioriser la collaboration et le développement avant les partis politiques – passage complexe et tendu, difficile à réaliser partout.

1. Selon CGLUA, les dépenses des gouvernements locaux dans la plupart des pays d’Afrique constituent moins de 10 % des dépenses nationales, contre la moyenne de 25 % des pays OCDE.
2. Diop, Amadou, « Dakar », chapitre 3, in Bekker, Simon (éd.), Capital Cities in Africa, HSRC Press, 2011, p.42.
3. Comme moyenne approximative pour la durée (2012-14) du Programme des Finances Municipales de Dakar, le taux d’échange utilisé ici sera de 500 FCFA pour 1 $US.
4.La Ville a des responsabilités dans neuf domaines : la gestion du patrimoine, de l’environnement, et des ressources naturelles ; la santé, la population, et l’action sociale ; sports et loisirs pour les jeunes ; la culture ; l’éducation ; la planification régionale ; la planification urbaine et le logement.
5. Diop, Amadou, op. cit., p.40.
6.Les citations dans le texte proviennent d’entretiens à Dakar en mai/juin 2014, sauf indication contraire.
7.L’examen PEFA a été financé par le Mécanisme consultatif sur les infrastructures publiques et privées (PPIAF) – fonds multidonateur. Le cadre PEFA établit 31 indicateurs principaux ; il a été instauré en 2005 pour évaluer les gouvernements centraux.
8.Ville de Dakar: Evaluation de la Gestion des Finances Publiques Municipales: Rapport PEFA sur les performances, 30 janv. 2009, p. 68.
9. A l’automne 2011, le DMFP a obtenu une subvention de 500 000 $US de la Fondation Bill & Melinda Gates pour réaliser l’évaluation de faisabilité. Un engagement ultérieur de la Fondation fournira jusqu’à 4,9 millions $US. Il fallait que le projet génère des revenus et qu’il profite aux pauvres en zones urbaines, selon une exigence spécifique. Le PPIAF, le’USAID, l’AFD, et Cities Alliance ont eux aussi fourni de l’aide.
10.Paulais, Thierry, Financing Africa’s Cities: The Imperative of Local Investment, World Bank and Cities Alliance, 2012.
11. V. Monkam, Nara & Moore, Mick, « Les avantages de l’impôt foncier pour l’Afrique », Africa Research Institute, janv. 2015.

The post L’Émission de l’obligation municipale à Dakar : Le Conte de Deux Cités appeared first on Africa Research Institute.

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More than two decades after the end of apartheid, land remains an emotive fault line in South Africa. Many in rural communities have lost patience with the paternalistic approach of traditional leaders, commercial farmers and mining corporations. The African National Congress (ANC) has assiduously courted the interests of these groups at the expense of the rural poor. By over-promising and under-delivering on land reform, the ANC has provided fuel to militant activists, who are calling for the expropriation of land without compensation.

In April 2016, ARI was invited to attend a symposium on land, law and traditional leadership that the Nelson Mandela Foundation (NMF) and Council for the Advancement of the South African Constitution (CASAC) hosted. On the 103rd anniversary of the Natives Land Act, which precipitated widespread dispossession and forced relocation of black South Africans, this Briefing Note summarises the provocation papers discussed at the symposium and sets out recommendations for a bold new approach to land reform.

• Land redistribution: tinkering at the edges
• Tenure insecurity
• Echoes of apartheid
• Opportunities for enrichment
• Inkosi yinkosi ngabantu – “A chief is a chief by the people”
• A way forward
• Sources

Section 25 of South Africa’s constitution, which deals with the land question, was the last to be agreed by negotiators. It defines land reform as being in the “public interest”, albeit in a context where existing property rights are respected. Tension between individual freedom to hold property and the imperative to address historical injustices persists. While recognising that indigenous populations were driven off the land, redress for past wrongs has to be balanced with the need to provide security of tenure, maintain food security, promote economic growth and foster national reconciliation.

Some 8 million hectares of formerly white-owned land has been transferred to black South Africans through land reform.2 The state has purchased farms put up for sale ad hoc, on a “willing buyer, willing seller” (WBWS) basis at market value. However, little has been done to match demand with supply or devise a purchase programme with the potential to transform the agrarian economy and rural livelihoods.

The WBWS approach is more conservative than the constitution requires. The basic law empowers the state to take “reasonable measures” to foster “access to land on an equitable basis”. It provides for expropriation with compensation. The Constitutional Court has ruled that there are no consistent means of determining the amount of compensation, leaving the door open to negotiated settlements.3 In May 2016, however, parliament passed the Expropriation Bill, which, if enacted, would establish the office of valuer-general and provide scope for the government to determine “just and equitable” compensation for compulsory purchases of land, subject to court appeal. The legislation could expedite the acquisition and redistribution of land that is subject to historical claims.

Land redistribution: tinkering at the edges
If expropriation is pursued, a major challenge will be to prevent the enrichment of the politically connected at the expense of the rural poor. Under the Proactive Land Acquisition Strategy (PLAS), which began in 2006, the state purchased farms and leased them to applicants for 3-5 year terms, during which their productivity was monitored. The beneficiaries were for the most part not from the “rural masses”, undermining the purpose and potential of land reform.5 In 2010, a minister at the Department of Rural Development and Land Reform (DRDLR) claimed that 90% of redistributed farms were no longer productive, although researchers have contested this pessimistic assessment.6

In 2013, President Jacob Zuma applied a State Land Lease and Disposal Policy to farms leased under PLAS. This provided medium- and large-scale farmers with 30-year leases, renewable for a further 20 years, after which they would have the option to purchase the property. Small-scale farmers and households with limited access to land were overlooked. The apparent bias in favour of a relatively small elite was further replicated in the Recapitalisation and Development Policy Programme (Recap) in 2014, with its insistence on land reform beneficiaries having business plans and mentors from the private sector. Aspirant black commercial farmers have taken government grants and bank loans, and hired consultants, but done little to alter the structural imbalance in the agrarian economy.

The concentration of agricultural production in a small number of commercial farms remains by and large unchallenged. Over the past two decades, such enterprises have become integrated into the global economy, increasingly specialised and much less labour intensive. In addition to its drastic reduction of formal jobs, the large-scale farm model has failed to boost non-farm livelihood opportunities. At the other end of the scale, some 200,000 small-scale black farmers who supply informal markets, often via bakkie7 traders, have been neglected. Redistributing land from the former to the latter could promote agrarian transformation, especially if coupled with reform of water provision. This has been ignored, despite irrigation being a critical factor in agricultural productivity, and access to water being a constitutional right and a focus of the National Development Plan.

The emphasis in land reform on large-scale farms and racial inequality has been at the expense of satisfactorily addressing underlying grievances or the root causes of rural poverty. Issues of class and gender have been overlooked. The emergence of a new party, the Economic Freedom Fighters, led by former ANC Youth League president, Julius Malema, prompted the ANC to adopt a more radical position on land ahead of the 2014 elections. A “50/50” policy 8 proposed that those holding title to commercial farms would retain 50% ownership while ceding the balance to workers, with shareholdings determined by length of service, starting at 10 years. This followed a moratorium on farm equity share schemes based on an inquiry by the DRDLR into their effectiveness. Perversely, such a model creates an incentive for farm owners to lay off workers before they reach milestones to qualify for a shareholding. It provides landowners with a windfall of public funds and does nothing to protect farm dwellers from eviction.

Tenure insecurity
Land tenure, or the legal right of ownership, has yet to be meaningfully reformed. There is a misguided sense that private property rights remain the “gold standard”; anything else is perceived as a second-tier category of ownership. Yet around 60% of South Africans hold rights to land and property outside of the formal system. The 50/50 policy would not provide title documents to the estimated 2 million labour tenants on commercial farms.

Approximately 5 million South Africans have been awarded Reconstruction and Development Programme (RDP) social housing without title deeds, while some 1.5 million possess inaccurate deeds to an RDP property. Siyabulela Manona, a director at Umhlaba Consulting Group, told ARI that some South Africans decided to accept RDP houses because that was what was on offer, even though it was not what they wanted.

“In Mqanduli, Eastern Cape, I spotted hundreds of RDP houses without curtains,” says Manona. “On further inquiry, I was informed that the houses have been left empty because the majority of beneficiaries had migrated to cities in search of work. Those who remained used the homes as goat sheds.” Without title deeds, beneficiaries of RDP houses are unable to sell the property. Many reside in city slums, unable to access housing grants because government records list them as owning an RDP property in their home district.

An estimated 3.3 million South Africans live in informal settlements without any formal proof of land rights, while a further 1.9 million inhabit backyard shacks in similarly precarious locations. Every year, parliament must renew the Interim Protection of Informal Land Rights Act of 1996 to secure the rights of about 17 million citizens residing on communal land.
Many groups that were forcibly relocated to the Bantustans – or so-called black “homelands” – during the apartheid era have established Communal Property Associations (CPAs) to hold restored or redistributed land.9 Yet, in some locations traditional leaders have opposed such arrangements, sensing a challenge to what they perceive as their own rights to the land. On the platinum belt in North West province, for example, the Bakgatla-ba-Kgafela community had to litigate against their chief to preserve their rights to administer restored land under a CPA.

Such power struggles are in part the legacy of a deal the ANC struck with chiefs ahead of the 2004 general election. In what was widely interpreted as vote-buying, parliament passed the Traditional Leadership and Governance Framework Act (TLGFA) in November 2003, and the Communal Land Rights Act (CLaRA) in February 2004. Traditional leaders in KwaZulu-Natal shifted their support from the Inkatha Freedom Party (IFP) to the ANC, enabling the ANC to win elections in the province for the first time. This came at a cost to genuine land reform, entrenching rather than dismantling apartheid-era divisions over land rights and ownership.

Echoes of apartheid
Controversially, the TLGFA reinstated, in the guise of traditional councils, the tribal authorities created under the 1951 Bantu Authorities Act, and provided scope for them to administer land. CLaRA proposed to transfer land and title deeds within areas defined by the 1951 legislation from the state to traditional councils led by chiefs. Individuals and families were to have tenure rights under customary law downgraded to “institutional use rights” to communal land. This would in effect have made rural citizens subjects of the chiefs – as they were in the Bantustans during apartheid.

As a potential “land grab”, CLaRA attracted widespread opposition. Four groups that the Act would have deprived of formal land rights brought a case challenging the legislation. Two appellants had purchased land and two had been awarded land through restitution before finding it subsumed within an area subject to the jurisdiction of a chief.11 In 2010, CLaRA was ruled unconstitutional, albeit properly consulted about the legislation.

In 2014, a Communal Land Tenure Policy (CLTP) was prepared to address ongoing land tenure insecurity in the former Bantustans. The policy largely echoes CLaRA. Rather than legally securing land rights based on custom, or allowing land to be vested in CPAs, with their ostensibly democratic structures,12 it proposed handing authority over land administration to traditional councils, which would be provided with legal title and award institutional use rights to individuals and families.

Under the CLTP, traditional councils would also become responsible for overseeing local investment and development, as well as natural resources on communal land. The implicit bargain was that chiefs would benefit from greater authority over local mining, infrastructure, and forestry projects in return for delivering rural votes for the ANC by wielding, if necessary, their discretionary power over land distribution in their communities.13 This clientelist approach to governing was reminiscent of that adopted by the National Party in the Bantustans.

Opportunities for enrichment
The government continues to connect land issues with the electoral cycle rather than seeking to resolve an issue that has the potential to be politically destabilising. Despite the fact that in August 2013 more than 20,000 land restitution claims were “settled” but not yet finalised or implemented, and about half of the land already acquired for restitution was still to be transferred to its intended beneficiaries, less than six weeks before the April 2014 general election the ANC re-opened the window for lodging new claims. The window had been closed on 31 December 1998.

The Restitution of Land Rights Amendment Act (RLRAA), which the National Council of Provinces passed on 27 March 2014, allows for claims until 30 June 2019. A month before its enactment, speaking at the opening of the National House of Traditional Leaders, Zuma told the chiefs to “find good lawyers” and “to look at the claims on behalf of your people”.14 The decision to allow new claims that are likely to be settled with cash compensation or provide opportunities for traditional leaders belies a greater interest in “vote-catching and political theatre [than] meaningful rural change.”15

King Goodwill Zwelithini is the most prominent leader to announce his intention to lodge a claim under the RLRAA. In his case, it may possibly be for the entire province of KwaZulu-Natal, including the city of Durban, and parts of neighbouring provinces. The king already administers one-third of the land in KwaZulu-Natal – some 2.8 million hectares – through the Ingonyama Trust, of which he is the sole trustee. Legislation stipulates that the trust must administer land “for the benefit, material welfare and social well-being” of local communities. However, it has tended to impose leases on those who have customary rights to the land – usually a weaker form of tenure that forces people to pay rent for land they in effect “own”. In June 2016, King Zwelithini announced plans for those residing on Ingonyama Trust land to be awarded title deeds. Judge Jerome Ngwenya, chairman of the trust board, subsequently clarified that the task would take many years to conclude, and would require funds from central government to cover the cost of surveys and land audits.

The Ingonyama Trust has been criticised for authorising mining activities without popular consultation. One well-known example is in Makhasaneni, near Melmouth in northern KwaZulu-Natal, where the local chief granted permission for prospecting to the Indian mining company, Jindal, and its local partner, Sungu Sungu, without the written consent of the community.16 The people confronted the chief, Thandazani Zulu, following the destruction of crops, death of livestock from poisoned water and damage to ancient family graves. Their leader apologised to the community for not consulting them, but insisted that Jindal be allowed to continue prospecting. The chief’s brothers, employees of Jindal, have subsequently been accused of intimidating local activists.

This type of confrontation is not unique to KwaZulu-Natal. In Eastern Cape, Xolobeni, part of the Transkei homeland during apartheid, is now under the Amadiba Tribal Authority. Here, rural activists have opposed attempts by Australian company Mineral Commodities Limited and its local partner – in which the chief has an interest – to develop a titanium mine. In March 2016 Sikhosiphi ‘Bazooka’ Rhadebe, chairman of the Amadiba Crisis Community, was shot dead outside his home.

There is a growing feeling in South Africa that customary land rights are only respected in the absence of lucrative business opportunities. When presented with a choice between personal profit and rural livelihoods, some traditional leaders evidently opt for the former. By advancing the authority of traditional leaders at the expense of ordinary rural landholders, the proposed CLTP would only exacerbate the risk of chiefs ignoring the interests of citizens.

Aninka Claassens, a former adviser to the minister of land affairs now at the University of Cape Town, argues that “current policies are entrenching [the] legacy of exclusion, by bolstering the power of a small elite at the expense of the majority of rural South Africans.”17 This may help the ANC to secure votes, but in doing so the government is neglecting its constitutional obligation to address land tenure insecurity caused by apartheid discrimination.18

Inkosi yinkosi ngabantu – “A chief is a chief by the people”19
Parliament is currently deliberating the Traditional and Khoi-San Leadership Bill (TKLB), which is intended to replace the TLGFA. The TKLB would empower Khoi-San leaders to administer the affairs of their people, wherever they are. As with the TLGFA, it would give chiefs jurisdiction over defined geographical areas, thus entrenching Bantustan-era boundaries and policies rather than reflecting customary practices. It provides no safeguards for land tenure and instead risks locking rural citizens into the tribal structures established under the 1951 Black Authorities Act. The TKLB exhibits many of the same shortcomings and potential to stir controversy as CLaRA, which the Constitutional Court struck down in 2010.

In what looks to many like further electioneering, the ANC appears intent on again trying to push the Traditional Courts Bill (TCB) through parliament, despite failed attempts in 2008 and 2012-13. The TCB would enable traditional courts to withdraw land rights from rural citizens without respecting existing accountability mechanisms such as the need for a pitso (community meeting). Widows would become particularly vulnerable to expulsion from land, because the legislation would maintain current patriarchal practices that restrict women from representing themselves in traditional courts.

According to Mbongiseni Buthelezi from the Public Affairs Research Institute, the TCB would establish “a segregated legal system, subjecting rural citizens to traditional leaders who, in many cases, were complicit in forced removals in order to gain power.”20 On 19 April, Justice and Correctional Services Minister Michael Masutha announced that a re-drafted version of the TCB could be introduced in parliament in June ahead of elections on 3 August 2016. While it may be politically expedient for the ANC to rule by proxy in the former Bantustans and in Khoi-San communities across Northern Cape, the TKLB and TCB would only undermine structural land reform and agrarian development. If the ANC wants to address rural poverty rather than use land to its political advantage, it needs a new approach.

A way forward
Land reform has failed to address the structural realities of rural poverty, and economic and gender inequality in South Africa. A Bantustan-era approach to rural “development” has been employed that has not brought about the radical agrarian transformation required. At the NMF-CASAC symposium, Prof. Ben Cousins, chair in Poverty, Land and Agrarian Studies at the University of the Western Cape, made the following policy provocations:

1.Support smallholders
It is estimated that the top 20% of commercial farms – around 7,000 highly capitalised operations – account for 80% of South Africa’s total agricultural production by value. The land belonging to the remaining 80% of commercial farmers could be expropriated and redistributed to 200,000 market-oriented smallholder farmers. They already produce crops and livestock for sale, and have scope to expand in peri-urban areas by supplying informal food markets. The top producers should be left undisturbed for two decades to avoid putting urban food security and agricultural exports at risk. Large farms could be subdivided, where feasible.

2.Invest in the future
Changing section 25 of the constitution is unnecessary when the law already provides for expropriation with compensation. The state could achieve more “bang for its buck” if a formula for “just and equitable compensation” was agreed on that brought the price of land down to 15–20% below market value. The ANC’s proposal for a valuer-general might be a step in this direction. If the government were to allocate greater financial resources to land reform, increasing the sum by a factor of five – from 0.4% to 2% of the national budget – it could finally resolve the emotive and potentially destabilising “Land Question”. The increase in financial resources would need to be accompanied by additional investment in bureaucratic competence, additional extension staff, revising institutional structures and procedures, and improved systems for data collection and analysis.

3. End rather than extend
The majority of land restitution claims should be settled through cash compensation. The process has consumed a disproportionate amount of state capacity while yielding few sustainable benefits. The vast majority of claimants have no interest in returning to rural land, nor the skills to tend to the plots taken from them. A pragmatic approach would be to seek closure by paying compensation through standard settlement offers, as has been the practice for most urban land claims. In instances where claimants genuinely want to farm, restoration of some of the land could be considered. The decision to extend the period for lodging land claims until 2019 should be abandoned rather than further raising expectations on a sensitive issue.

4. Leave rural development to local government
The Comprehensive Rural Development Programme that the Cabinet adopted in 2009 has proved to be an expensive and ineffective distraction. Municipal governments should be responsible for the co-ordination of developmental investment in rural areas. Strengthening the capacity of local authorities would yield greater returns than the current restrictive Bantustan-era approach to rural “development”. Pilot projects to test what works in a given context should be encouraged and the results shared widely. In communal areas, efforts to enhance household food security should be the main focus of support and aimed at women in particular.

5.Secure informal land rights
Private ownership through individual titles remains too costly for most citizens. They could gain secure property rights through social tenures21– a continuum of land rights afforded to individuals or groups, but which transcend individual ownership of parcels of surveyed land – provided these were properly recognised and supported. This would require a step change from the cadastral system to an approach that adopted lower levels of precision in surveying plots of land; flexible social and territorial boundaries; means for registering co-ownership by family members; changes to township development procedures; new systems for the collection of rates; and the retraining of lawyers, surveyors and planners. New sets of skills would have to be developed to support the processual dimensions of land holding: facilitation, mediation, dispute resolution and oversight of governance.

1. For the provocation papers by Ben Cousins, “Land reform in South Africa is sinking. Can it be saved?” and Mbongiseni Buthelezi and Stha Yeni, “Traditional Leadership in Democratic South Africa: Pitfalls and Prospects”, see: http://bit.ly/SAland1

2. About 3.2 million hectares has been transferred through restitution and 4.8 million hectares through redistribution. See Department of Rural Development and Land Reform, Annual Report, 1 April 2014 – 31 March 2015, http://bit.ly/SAland2

3. Michael Akomaye Yanou, Dispossession and Access to Land in South Africa: An African Perspective, Langaa Research & Publishing CIG, 2009 p.60.

4. A revised Expropriation Bill was published in the Government Gazette on 26 January 2015. The bill was adopted by the National Assembly on 23 February and the National Council of Provinces on 18 May. To become law it must be signed by the president. Similar draft legislation presented in 2008 was deemed to be unconstitutional.

5. Ben Cousins, “New land redistribution policies in South Africa”, Focus on Land, Landesa, January 2014, http://bit.ly/SAland5

6. Ben Cousins and Alex Dubb, “Many Land Reform Projects Improve Beneficiary Livelihoods”, PLAAS Land Reform Fact Check 4, Cape Town, 2013, http://bit.ly/SAland6

7. A ‘bakkie’ is a small utility van.

8. Outlined under “Strengthening the Relative Rights of People Working the Land draft policy framework”, DRDLR, 21 February 2014

9. For details see “Communal Property Associations”, Centre for Law and Society, University of Cape Town, February 2015, http://bit.ly/SAland9

10. ANC National General Council Discussion Document quoted in “A critical analysis of the Traditional and Khoi-San Leadership Bill, 2015: II – The current regulation of traditional leadership”, Helen Suzman Foundation, 8 December 2015, http://bit.ly/SAland10

11. Tongoane and Others v National Minister for Agriculture and Land Affairs and Others (CCT100/09) [2010] ZACC 10; Constitutional Court of South Africa, 11 May 2010.

12. By law, the constitutions of CPAs must provide for equal membership, fair and inclusive decision making, and democratic processes. A problem arises, however, where such principles are incompatible with local realities and subject to interference from local elites. See schedule 9 of the Communal Property Associations Act, 1996, http://bit.ly/SAland12

13. Lesego Loate, “Communal Land Tenure Policy: State land grabbing and the coercive use of land to create voting blocks?”, PLAAS, University of the Western Cape, 19 September 2014, http://bit.ly/SAland13

14. “Land reform: Find a good lawyer, says Zuma”, Mail & Guardian, 27 February 2014, http://bit.ly/SAland14

15. Ben Cousins, Ruth Hall, Alex Dubb, “The Restitution of Land Rights Amendment Act of 2014 – What are the real implications of reopening land claims?” PLAAS Policy Brief 34, 2014, http://bit.ly/SAland15

16. Tabelo Timse, ‘King’s Trust sells people out to mining’, Mail & Guardian, 5 June 2015, http://bit.ly/SAland16

17. Cherryl Walker and Ben Cousins, “Introduction”, Land Divided, Land Restored: Land reform in South Africa for the 21st Century, Jacana, Auckland Park, South Africa, 2015 p.8

18. “A person or community whose tenure of land is Iegally insecure as a result of past racially discriminatory laws or practices is entitled, to the extent provided by an Act of Parliament, either to tenure which is legally secure or to comparable redress.” Section 25 (6), Constitution of the Republic of South Africa (1996).

19. A Zulu and Ndebele proverb meaning that a leader’s power depends on popular support.

20 .Mbongiseni Buthelezi, “Government insults rural citizens on traditional courts”, Custom Contested, 27 November 2013, http://bit.ly/SAland20

21. H.W.O. Okoth-Ogendo, ‘The nature of land rights under indigenous law in Africa’, Land, Power and Custom: Controversies generated by South Africa’s Communal Land Rights Act, University of Cape Town

The post Land, Law and Traditional Leadership in South Africa appeared first on Africa Research Institute.

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Central and municipal governments are being overwhelmed by the rapid growth of Africa’s cities. Strategic planning has been insufficient and the provision of basic services to residents is worsening. Since the 1990s, widespread devolution has substantially shifted responsibility for coping with urbanisation to local authorities, yet municipal governments across Africa receive a paltry share of national income with which to discharge their responsibilities.1 Responsible and proactive city authorities are examining how to improve revenue generation and diversify their sources of finance. Municipal bonds may be a financing option for some capital cities, depending on the legal and regulatory environment, investor appetite, and the creditworthiness of the borrower and proposed investment projects. This Briefing Note describes an attempt by the city of Dakar, the capital of Senegal, to launch the first municipal bond in the West African Economic and Monetary Union (WAEMU) area, and considers the ramifications of the central government blocking the initiative.

• Contested capital
•  A confusion of powers
• Dakar Invests
• Going to the Market
• Dakar rated…and blocked
• Funding Africa’s urbanisation
• Sources

Contested capital

During the 2000s President Abdoulaye Wade sought to establish Dakar as a major investment destination and transform it into a “world-class” city. A massive construction programme created new roads, shopping malls and hotels, as well as controversial creations such as the Monument de la Renaissance Africaine and Porte du Troisième Millénaire. In 2008, Dakar played host to the Organisation of the Islamic Conference (OIC) summit. Work commenced on a new international airport. Wade’s grand vision echoed that of President Léopold Sédar Senghor in the 1960s.

For most Dakarois, the benefits of new infrastructure were elusive. “You can’t eat roads” was a common saying in a city where only one in five could find full-time employment. The chronic shortage of jobs and affordable housing, food price riots, poor transport services and traffic congestion, flooding, erratic waste management, broken sewage pipes and frequent power cuts typified the “other” Dakar. In the slums and squatter communities where 40% of the population live, and in many formal housing and business areas, the state is largely ineffectual. Amadou Diop, a professor of geography, has described “the key characteristics” of his city as “uncontrolled growth, unorganised and unbalanced land occupation, a marked crisis and a declining environment”.2

Khalifa Sall of the Parti Socialiste was elected Mayor of Dakar in 2009, unseating an ally of Wade. He promised to improve the city, especially for its poorer residents, and to ensure much greater public participation in its affairs. Sall was re-elected in 2014 and by then had emerged as a standard bearer for active local government throughout Africa as general secretary of the International Association of Francophone Mayors (AIMF) and president of the United Cities and Local Governments of Africa (UCLGA). In 2012, Dakar hosted Africities, UCLGA’s triennial gathering of thousands of local government experts and officials from across the continent. Khalifa Sall also pressed for the adoption of an African Charter on Local Government and the establishment of an African Union High Council on Local Authorities. For Sall, those closest to the people – local government – must drive pro-poor development or it will not occur at all.

Dakar has long been the key battleground for competing political and business interests. Early in Khalifa Sall’s first term, for example, conflict erupted between his administration and Wade over waste management in the capital. When flooding occurs, responsibility for making good the damage is always disputed. Although the parties of Dakar’s mayor and the current president, Macky Sall, joined forces to unseat Wade, and the two frequently voice their willingness to work together for the betterment of Dakar, they are political rivals. When party politics are to the fore, as they were during the 2014 local elections, this becomes particularly relevant. Equally significant to the pace and efficacy of the development of Senegal’s capital is the country’s ongoing decentralisation programme.

A confusion of powers

Senegal’s 1996 Municipal Administration Code was formulated to placate political opposition to the government of Abdou Diouf, president since 1981. The legislation provided for the transfer of significant powers to local government through decentralisation and devolution, and promoted citizen participation and regional planning. The rhetoric articulated the principle of subsidiarity, bringing government closer to the people. Furthermore, Article 58 of Law 96-07 stipulates that no function should be transferred to local government without the transfer of adequate resources, provided by receipts from certain types of tax, grants or both. This has never been the case for Dakar. The state has routinely withheld funding from municipalities, particularly those in the hands of opposition parties. Erratic, arbitrary and non-transparent financial transfers are a feature of Senegal’s decentralisation that severely undermines its stated purpose.

In Dakar, the continued predominance of the state is personified administratively by the government appointed préfet du département de Dakar and fiscally by the percepteur, in effect the city’s external accountant. Both are empowered to intervene in, as well as oversee, city administration; but the city of Dakar has no mechanism to force central government to pay its dues. Several initiatives set up by the state to increase local authority financing have not been successful. Allowances to Dakar, ostensibly to fund the functions transferred by decentralisation, averaged a paltry FCFA322m (US$650,000)3 per annum in 2008-12, less than 1% of the city’s budget.

Without the regular transfer of the resources to which it is legally entitled, Dakar cannot fulfil all its devolved responsibilities, which are significant.4 There is limited scope to increase resources by improving local revenue collection because taxation is highly centralised. Although the city succeeded in increasing its own revenues by almost 40% in 2008–12, it has control over less than 10% of its total revenue, mostly generated from fees for advertising billboards. After two decades decentralisation has yet to deliver what it originally promised to the residents of Dakar.

The framework of decentralisation creates considerable overlap between national and local government systems. While relations on a day-to-day basis are mostly harmonious, a “confusion of powers”5 frequently complicates or frustrates local planning and administration. Ambiguity in the definition of responsibilities is a key stumbling block to more effective collaboration between central and municipal governments in Dakar.

Dakar invests

Khalifa Sall was determined that the city council should gain credibility for competent administration and not be reduced to inaction by financial limitations. “We took the decision at the outset to invest the city’s resources, such as they were, in all functions we are responsible for – social, cultural, sport and others”, the mayor told ARI.6 Early initiatives in education included a school milk programme, free school uniforms and computers for elementary schools, and free annual medical examinations for children. Major public works involving the “Dakar volunteers” programme for unemployed youth included paving and sand clearance from the city centre.

Sall sought funding wherever he could. He was helped by Dakar having undergone a Public Expenditure and Financial Accountability (PEFA) review of its financial management system with a view to accessing loans and other external finance.7 T he city was the first subnational entity in Africa to be assessed in this way and its performance was mixed. The review judged that Dakar “[did] not have a programme of reforms, still less a programme of the management of public finances”8. Inadequacies in planning and forecasting were highlighted. Nevertheless, PEFA provided the impetus for improvements, for example in accountability, by making audits and evaluations public. Reforms were sufficient to enable Dakar to borrow. A €10m (US$16m) 20-year concessional loan had already been secured from Agence Française de Développement in 2008 to pay for street lighting improvements. Under Sall, commercial loans were approved: FCFA3.6bn (US$7.2m) from Ecobank to rebuild a downtown market; a three-year FCFA2.1bn (US$4.1m) loan from Banque Islamique du Sénégal for traffic lights; and FCFA9.7bn (US$19.5m) from the West African Development Bank for road rehabilitation and parking. To date, debt service and repayments of these loans have been made on time.

“We learned from the experience of investing in traffic lights, roads and pavements,” says Khalifa Sall. “Next, we decided we would undertake a real poverty reduction project”. A major investment in a 10ha commercial zone in Petersen, at the northern extremity of Dakar- Plateau municipality, was planned. As part of a strategy to reorganise the city centre, the zone included a new FCFA13bn (US$26m) market with affordable space and facilities for 4,000 or more of the city’s marchands ambulants – street vendors – and shopkeepers. The mayor banned street trading, a controversial move, but held frequent consultations with trader associations to explain his plans and hear objections. Although “poverty reduction, with the street vendors” is the objective, relations between the city authorities and marchands ambulants remain volatile and at times acrimonious.

If many of the marchands ambulants of downtown Dakar could be concentrated in a single location, there was another potential benefit. It would decongest Dakar-Plateau and the southernmost part of the peninsula. The World Bank estimates that Dakar’s traffic congestion, exacerbated by unregulated street trading, costs FCFA108bn (US$216m) in lost income a year. The project would also generate much-needed revenue for the city, reducing its financial dependency on the central government. The challenge was raising the required FCFA20bn (US$40m). In 2012, Dakar’s operating revenues were FCFA36.5bn (US$73m) and its capital expenditure FCFA11bn (US$22m).

Going to the market

Sall’s plans were drawn up against a backdrop of immense political turmoil in the run-up to Senegal’s 2012 presidential election. “From day to day, the mayor didn’t know if he’d be thrown in jail [by Wade]. Or if mayors would be abolished altogether,” says Khady Dia Sarr, director of the Dakar Municipal Finance Programme (DMFP), a team of four Senegalese professionals and one external expert established in the mayor’s office.9 Although alternatives existed, the attractions of issuing a municipal bond were clear. It would enable the city to borrow a large amount in a lump sum and at a cheaper rate than commercial borrowing. It would also signal a determination by the city not to rely on concessional financing and confidence in its ability to manage a large revenue-generating investment. Preparation for a bond issue “was a whole new process” for the mayor, DMFP and the city administration, according to DMFP’s co-ordinator Dieynaba Dabo. “No one knew exactly what to do.” Having finalised its plan in May, DMFP was officially launched in September 2012.

In most African countries sub-national entities are not allowed to borrow. Few municipalities are able to establish creditworthiness based on cash flow, debt profile and credit history to allay investor concerns about repayment of the loan. Few can show an adequate record of strategic planning, debt management and competent administration. In this context, Dakar was no different to most African capitals. Its self-generated income and resources were slight, its budget was substantially dependent on central government and its technical capacity limited. But following the PEFA assessment the city had established a Department of Planning and Sustainable Development (DPDD) capable of demonstrating that Dakar had a credible development strategy; and it had a short record of competent debt management.

The preparation for a municipal bond issue is crucial. The mayor and DMFP had to make cautious council members and the city’s finance, administration and planning departments feel involved and fully consulted. A new consultative council was established, which included civil society, business representatives and religious leaders. Small initiatives professionalised city administration and bolstered the expertise of the DPDD, to enhance Dakar’s strategic plan, the Department of Administration and Finance, to maximise revenue collection, and the Department of Urban Development, to help with the design and construction of the investment project.

The regulatory framework also had to be navigated: the bond needed to comply with the requirements of the issuing authority, WAEMU’s Conseil Régional de l’Épargne Publique et des Marchés Financiers (CREPMF), with headquarters in Abidjan, Côte d’Ivoire. Early in 2014, a World Bank team followed up on the PEFA review and advised the city on implementing further improvements in its fiscal revenue management. A successful issue is dependent on a credible investment plan, proactive communications and good timing.

Dakar rated… and blocked

At the outset, international ratings agency Moody’s was commissioned to provide a confidential credit rating for Dakar. The process appraised, among other things, the quality of the city’s decision making, budgetary planning, asset and debt management, and the predictability of revenues. The rating provided a benchmark against which improvements could be made before obtaining an official, public rating. Given that the bond would be launched in the WAEMU regional market, Bloomfield a ratings agency, based in Côte d’Ivoire and accredited by CREPMF, was selected.

In September 2013, after a rigorous three-month re-examination of its finances, Dakar received an A3 short-term rating and BBB+ long-term rating. Although this investment-grade rating would have been sufficient under the regulator’s guidelines for bond issuance, the city secured a partial guarantee for 50% of the principal amount of the bond from the United States Agency for International Development (USAID) to further enhance the transaction’s creditworthiness. Jeremy Gorelick, lead technical and financial adviser to DMFP, commented that “the presence of a credit enhancement from a well-respected guarantor like USAID helped to relieve some of the concerns about worst-case default scenarios.”

Once the city received its rating, the bond could be structured. The loan amount was set at FCFA20bn(US$40m) to be repaid after seven years. Annual interest of 6.6% was offered to investors. For the first two years none of the principal amount of the loan would be repayable, but USAID stipulated a reserve fund to finance the first such repayments. A Dakar-based firm was mandated to arrange the marketing and placing of the bond through 18 financial intermediaries in the eight WAEMU countries. In January 2015, after delays partly caused by the 2014 local elections, the launch of the bond on Abidjan’s Bourse régionale des valeurs mobilières, the regional securities exchange, was imminent. Press coverage and a regional investor roadshow began. Investor demand was reported as strong and in February CREPMF issued the visa authorising the issue to proceed.

Two days before the official launch date, Senegal’s ministry of the economy and finance suspended a written avis de non-objection it had given to the project in July 2014, presenting certain “technical objections” that blocked the bond issuance. Concerns and questions were raised about the city’s level of indebtedness; the potential liability of the state in the event of default for the 50% of the issue not covered by USAID’s guarantee; the political affiliation of the real estate developer who stood to benefit from the construction of the new Petersen commercial zone; and the legality of the issue under Act III of decentralisation. On 5 March, CREPMF withdrew the visa for the bond.

Khalifa Sall responded that nothing had changed since the government had given its permission to proceed. The préfet and the percepteur, an appointee of the ministry of the economy and finance, had approved the general and budgetary legality of the issue. Many of the mayor’s allies saw the block as being directed at Khalifa Sall personally. In the 2014 local elections he defeated the prime minister, Aminata Touré, put up as a candidate by the government to unseat him and win control of the capital. With the possibility of the mayor standing for the presidency against Macky Sall appearing more likely after he secured a second term as mayor, the influence of national politics on the management of Senegal’s capital was once again confirmed.

Funding Africa’s urbanisation

To date, rapid urbanisation has not been a key driver of economic growth in sub-Saharan Africa. It is characterised by the proliferation of unplanned slums devoid of basic service provision, spiralling youth unemployment, and escalating environmental hazard and degradation. The overwhelming majority of residents of most cities and their informal economic activity, on which a more prosperous future depends, are largely ignored by government master plans. There is a chronic shortfall in urban financing.

A 2012 study estimated Africa’s “municipal investment gap” at US$25 billion per annum. The report observed that “despite this pressing need most African local governments have limited access to capital markets and no private sector finance for infrastructure”.10 Diversification of funding is urgently required. Africa’s cities cannot continue to rely on inadequate handouts from central government and limited donor-funded concessional finance. Greater financial autonomy is a necessity. The crucial role of local governments in achieving the Sustainable Development Goals (SDGs) was recognised in the 2015 Addis Ababa Action Agenda; and it will be re-emphasised by the Habitat III global summit in October 2016.

Dakar showed an active, innovative approach to its funding requirements. Led by a dynamic, competent mayor the attempt to make a substantial pro-poor, revenue-generating investment funded by a municipal bond has much to teach other cities. DMFP was very much an indigenous initiative. The preparation for the bond issue did not require armies of external technocrats; a core of competent municipal administrators was sufficient, supported by external development finance institutions where necessary. Key city departments were required to carry out a few basic functions better and this was achieved through planning, communication and collaboration. By taking the city to the point of launching its bond, DMFP also highlighted the potential for bolstering municipal finance in Africa.

There is considerable scope for better tax administration by or on behalf of cities, improvements in revenue generation and cost control. For example, in Dakar the city administration could readily improve on inefficient central government collection of local taxes under a revenue-sharing agreement; and property tax has been seriously neglected as a source of municipal income.11 Existing regional bond markets are the foundations for municipal and state bond issuance in local currencies to African investors, but they could be bolstered by a more developed, affordable domestic credit ratings industry. Further development of the regulatory framework in regional bond markets would boost investor confidence and facilitate domestic mobilisation of more of Africa’s financial assets.

The human and economic resources of Dakar’s city administration are no greater than those of most African capitals. Its financial history was imperfect. Yet the city succeeded in building a convincing argument for its creditworthiness and crafting a bankable transaction that significantly exceeded standard debt service ratios for municipalities. These factors, combined with the USAID guarantee, attracted the core group of investors prepared to commit to investment. In December 2014, DMFP was awarded the Prix Guangzhou, initiated in 2012 by UCLGA and the city of Guangzhou. Dakar’s project was the only one from Africa in a field of 259 entries.

Like many capitals, Dakar is in fact two cities. A central government volte-face that subverted Dakar’s bond issue at the eleventh hour underscored that it is a fiercely contested political prize as well as being the direly underfunded centre and hub of Senegal’s economic activity. This duality has proved a significant obstruction to economic and social development in many capitals worldwide. But in Africa the need to circumvent it is particularly pressing. If urbanisation is to become an engine for development, collaboration and development will have to be prioritised over party politics – a complex and fraught transition to achieve anywhere.

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1.Local Governments Africa (UCLGA), local government expenditure in most African countries is less than 10% of national expenditure vs. an average of 25% in OECD countries

2. Diop, Amadou, “Dakar”, Chapter 3 in Bekker, Simon (ed.), Capital Cities in Africa HSRC Press, 2011, p.42

3. An FCFA500 : US$1 exchange rate has been used throughout as an approximate average for 2012–14, the duration of the Dakar Municipal Finance Programme.

4.The city has certain responsibilities in nine areas: estate, environment and natural resource management; health, population and social action; youth sports and leisure; culture; education; planning; regional planning; urban planning and housing.

5. Diop, Amadou, op. cit., p.40

6.All those quoted in the text were interviewed in Dakar in May/June 2014 unless otherwise indicated.

7.The PEFA assessment was funded by the multi-donor Public-Private Infrastructure Advisory Facility (PPIAF). The PEFA framework has 31 principal indicators and was introduced in 2005 to evaluate central governments.

8.Ville de Dakar: Evaluation de la gestion des finances publiques municipales: Rapport PEFA sur les performances, 30 Jan. 2009, p. 68

9. In Autumn 2011 DMFP received a grant of US$500,000 from the Bill & Melinda Gates Foundation to conduct the feasibility study. It received a subsequent commitment from the foundation to provide up to US$4.9m. A specific requirement of the grant was for the project to be revenue-generating and to benefit the urban poor. PPIAF, USAID, Agence Française de Développement and Cities Alliance also provided assistance.

10.Paulais, Thierry, Financing Africa’s Cities: The Imperative of Local Investment, World Bank and Cities Alliance, 2012

11. See Monkam, Nara and Moore, Mick, “How property tax would benefit Africa”, Africa Research Institute, Jan. 2015

The post Dakar’s municipal bond issue: A tale of two cities appeared first on Africa Research Institute.

March 2016

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In Nigeria’s March 2015 presidential election, the incumbent peacefully conceded defeat and transferred power to an opposition party for the first time since the end of military rule in 1999. Nigeria has the largest economy in Africa, generating about 20% of the continent’s total GDP, and transfers a far greater proportion of resources to sub-national government than any other country. Yet standards of governance remain extremely low, public services are among the worst in Africa and economic growth has exacerbated inequality rather than creating jobs. According to the National Bureau of Statistics, two out of three Nigerians live in poverty.

The federal system of governance in Nigeria is failing to provide the basic welfare for all citizens that the 1999 Constitution prescribes. On the first anniversary of the election victory of President Muhammadu Buhari, this Briefing Note examines the origins and purpose of the federation, state governments’ financial management and responsibilities, governors’ arbitrary power, and the need to increase internally generated state revenue. It suggests practicable reforms that could help change state governments from elected autocracies to agents of social and economic development.

• A federation for peace
•  Fiscal profligacy
• The governor’s domain
• Lagos: a state of exception?
• Detached states
• Sources

A federation for peace

Nigeria’s three-tier system of government – federal, state and local government area (LGA) – was born out of military rule. At independence in 1960, Nigeria had elected governments in its three regions – northern, western and eastern – and at federal level.¹ The regions were autonomous and broadly self-sufficient, but prone to intense rivalry between their dominant ethnic groups: the Hausa-Fulani, Yoruba and Ibo, respectively. After two military coups and the eastern region’s failed bid for secession, which triggered the Biafran War (1967–70), Gen. Yakubu Gowon’s regime replaced the regions with 12 states. The purpose of this “military federalism”² was to prevent Nigeria breaking apart.

In theory, by concentrating power and wealth centrally, the Federal Government could distribute resources to the states and balance the many ethnic, religious and other interest groups’ competing demands. Successive military rulers periodically created more states. By 1976, there were 19; two more were added in 1987, and a further 15 in 1996, as well as the Federal Capital Territory, which contained the national capital Abuja. The number of states has remained unaltered for two decades, but the creation of LGAs in 1979 established a third tier of government that has progressively expanded.

A federal structure, whose prime objective was to maintain security by curbing regional and ethnic influence, does not foster development. Despite receiving about half the national revenue – a sum of N2.7 trillion in 2014 (US$13.5 billion at current official exchange rate) – state governments fail to provide the services that could materially improve the lives of tens of millions of Nigerians. The 2015 United Nations Human Development Index ranked Nigeria 152nd out of 187 countries. State authorities are not accountable to citizens, state institutions are weak and corruption is endemic. The 774 LGAs – the most proximate form of government for most Nigerians – have all but ceased to function. Furthermore, groups armed by or linked to state governors have been responsible for the most deadly outbreaks of violence of the past decade: ethnic clashes in Plateau state, conflict in the Niger Delta and the Boko Haram insurgency.

Fiscal profligacy

The 1999 Constitution imposed by the outgoing military government, the fourth since independence, increased states’ responsibility to provide social services and infrastructure. Intended as an interim document, the constitution was deliberately vague about demarcation. A new constitution has never been forthcoming. Overlap and ambiguity regarding federal, state and LGA responsibilities persist, with intense debate and confusion about which tier of government is responsible for what. For example, responsibility for education is split across the three levels, but the collapse of primary and secondary schools nominally run by LGAs or states forced the Federal Government to intervene through the Universal Basic Education programme to reduce illiteracy.

Transparency in sub-national government is as lacking as clear definitions of responsibilities. No state government has issued audited accounts for a year more recent than 2013; Katsina’s most recent are for 2012. There is little public scrutiny of state revenues and expenditure. It is widely believed that many governors gain power through fraud or bribery and pack state assemblies with supporters who will not hold them to account.

The federal allocation is meant to supplement the revenue states generate from taxes on personal income, property and other sources. However, in more than three-quarters of states, the federal allocation provides more than 80% of total revenue. States’ internally generated revenue (IGR) falls well short of even covering personnel costs. Furthermore, IGR usually relies on sources that require the least tax effort such as PAYE – income tax automatically deducted at source from salaries. According to the National Bureau of Statistics, two-thirds of states make at least half their IGR from this source.

Akwa Ibom, the state that produces the most oil, derives almost all of its N462 billion (US$2.3 billion) budget from the federal “handout”. It covers only a fraction of its recurrent costs with local revenue and routinely accrues substantial bank debts and salary arrears. The example may be extreme, but when receipts from the federal revenue pool in the first nine months of 2015 halved compared to the previous year, due to the collapse in global oil prices, most states rapidly became insolvent. One of Buhari’s first decisions as president was to authorise a bailout fund for 27 indebted states endowed with N338 billion (US$1.7 billion) of federal government funds – a sum substantially larger than the annual budget of the Ministry of Health or the budget for defence and the armed forces. In addition, the Debt Management Office converted N324 billion (US$1.6 billion) of state debt to long term bonds.

“If everyone in the states had budgeted correctly there would have been no need for this [bailout],” a former state finance commissioner told ARI. “Even when the oil price was high, virtually all the states were spending more than they earned”. Whether the bailout was to stave off a potential collapse of banks that had lent large sums to state governments or was politically motivated is unclear. But the finance commissioner regards the decision as a missed opportunity. “[Buhari] could have imposed conditions – revenue and spending targets – on the states before agreeing to bail out their debts and approve new money”. The Federal Government has in effect refunded the costs of state mismanagement and profligacy.

The governor’s domain

A governor’s character and intentions are the most important factors in determining a state government’s performance. This seldom works to the people’s advantage. According to Yusuf Tuggar, a candidate for the governorship of Bauchi in 2011:

“Many elected governors have no programme or blueprint at the start of their tenure and instead of working out a few priorities that the state can afford, they set up expensive projects which they pass on to the [Federal Government] to fund, or abandon them when the funding runs out. In my state, this involved roads and airports that we don’t need and for which some of the expenditure can be diverted into political funding.”
Misconceived or abandoned state-funded projects are found throughout the country, from Cross River’s grand plan to rival Dubai as a tourist attraction to a former governor of Jigawa’s scheme to turn his Sahelian state into an IT hub. The government of Katsina, Buhari’s home state in the far north-west, built a school in a different country – Niger.

State elections seldom hold anyone to account. Poor provision of health care, housing, education and infrastructure or lack of support for agriculture does not prevent the corrupt or ineffective from securing re-election. Electoral fraud is commonplace. “A governor is usually voted in because the political ‘godfather’ decided he should be,” explains Jibrin Ibrahim, professor of political science at Ahmadu Bello University in Zaria. The state administers LGA elections, which are typically either rigged or not held at all. “It’s very rare that a candidate from a party in opposition to the governor wins an LGA seat,” says Prof. Ibrahim.

Winning an election is an expensive business. Financial backers and supporters expect a payback within the maximum of two four-year terms a governor can serve. But the rewards are lucrative. By law, governors in many states receive their salary for life and keep perks from their time in office such as official houses, cars and furniture. Furthermore, many aspire to move further up the political ladder; for example, to a seat in the Federal Senate, where they can count on total remuneration of more than US$1.5 million a year. Short-term personal gain trumps concerted attempts at state management and development.

The marginal significance in most states of IGR further undermines representative government and accountability. State governments do not depend on the citizens they govern for revenue, so the citizens have little or no leverage. “As long as they receive a handout each month from the centre, governors can rig state election[s] and the constituents have no say in who governs them,” says Chidi Odinkalu, a senior lawyer and chair of the National Human Rights Commission. However, the oil price collapse is a warning against undue indifference among state governments. The Federal Government cannot afford repeated bailouts. According to the DFID-funded State Partnership for Accountability, Responsiveness and Capability (SPARC) programme:

“If oil were at US$20 a barrel, at 2014 budget levels only three states would be able to cover their recurrent costs with recurrent revenues: Lagos, because it generates substantial revenues internally and depends less on federal transfers; Kano, because of the amount the state receives in federal transfers due to the large number of local government areas; and Katsina, because the overhead and personnel costs are very low compared to other states”.

The nature of state governorship varies regionally. In the mainly Muslim north, where “cash and carry politics” is the norm according to one candidate in the recent state elections, imams and other religious leaders exert a powerful influence over state governments. The decision by almost all state governors in the north who took office in 1999 to adopt sharia law in the criminal code subordinated development objectives to religious observance. In the southern states, the political “godfathers” – former governors and their business backers – hold sway. Only in the south-west is there “a stronger culture of protecting the mandate of the electorate, so the popular pressure on the governors to perform is much higher than in most other parts of the country”, says Prof. Ibrahim. “But in general state governors are so powerful that they can choose to do whatever they want, which includes doing nothing.”
Improving governance is far from straightforward. A detailed study by SPARC of 10 states, rating each for governance systems and processes, found that Jigawa, in the far north, and Lagos had the greatest capacity to deliver realistic budgets, decentralise cash control, deliver improved procurement, account for LGA finances, manage staff for performance and
provide the public with better access to information.³ However, when Jigawa was advised to invest in corporate planning to improve its efficiency and quality of staffing, the state refused in favour of continuing to fund five emirate councils run by politically influential imams.

Lagos: a state of exception?

Lagos is frequently cited as setting the standard for improved state governance. It is the smallest by area but wealthiest state, home to Nigeria’s commercial capital, and has an abundance of well-qualified people. A decisive factor, however, in changing state administration was having its federal funding cut off in the early 2000s during a dispute between then President Olusegun Obasanjo and state governor Bola Tinubu, over Tinubu’s decision to create new LGAs in his domain. Shortage of funds forced the governor to assess what could be done to maximise the state’s IGR. But to raise tax revenues from various sources, including property, required a promise of benefits; and to make it sustainable those benefits had to be delivered to taxpayers. Federal funding resumed in 2007, but taxes still produce 60% of Lagos’s revenue. Its IGR, about N300 billion (US$1.5 billion) in 2014, is equivalent to the combined IGR of 32 of Nigeria’s 35 other states.⁴

Reliance on IGR made the Lagos state government more accountable to its electorate, who in turn became more aware of their right to judge its performance. Under Tinubu’s protégé and successor, Babatunde Fashola, crime was reduced, the environment improved, roads were built and the transport system expanded. Prompt action to contain a possible outbreak of Ebola in 2014 demonstrated governmental competence. Now that Fashola is a federal minister, many expect Nasir el-Rufai in Kaduna state, in the north-west, to earn the reputation as Nigeria’s most praiseworthy state governor. Elected in 2015, el-Rufai moved quickly to close the state’s commercial bank accounts; eliminate “ghost workers” from the payroll by introducing digital ID for the civil service; concentrate resources on infrastructure, transport and public services; and ensure that LGAs receive their correct share of funding.
While the marked improvement in the administration and revenue collection in Lagos state are commendable, admiration needs to be tempered. As a former state commissioner told ARI:

“Lagos could achieve far more. The state piled up huge debts to fund infrastructure on the wealthy islands, but we could have done better if more had been spent on housing and new towns on the mainland and the outer reaches of Lagos, which would have reduced congestion and created jobs. There was no emphasis on taking care of the less well-off. Lagos state since 1999 has done nothing for the under-privileged and low-income earners that make up about 90% of the population”.

The nature of politics and corruption has not altered. The same party – the Action Congress of Nigeria, now part of the All Progressives Congress national coalition – has controlled Lagos since 1999, which ensures that political patronage strongly influences investment decisions. Contract inflation is rife and transparency poor. As one donor official put it, “Lagos looks shiny from a distance, but not when you look closely”.

Detached states

Government in Nigeria “is detached from its people at every level of the federation”, says Chidi Odinkalu. The restoration of elected civilian government in 1999 has done little to invigorate state or local governments. The failure to promote transparent, accountable sub-national government as the engine for local development is a result of weak institutional capacity and lack of political will. Although most states appear to have been set up to fail economically, demands to create more continue. As a Nigerian political commentator put it to ARI, “people on a gravy train don’t ask to stop the train”.

Nigeria’s crude oil earnings declined by 40% in 2015. Low oil prices mean that states cannot rely on the Federal Accounts Allocation Committee to increase their diminished monthly payments. A process of “structural adjustment” is required. African Development Bank country director for Nigeria Ousmane Dore told ARI “we are very worried about state governments’ finances”.⁵ Some states will try to borrow their way out of difficulty rather than focusing on what, according to Dore, is “the main problem”: the lack of IGR. In the short term, the Federal Government needs to be clear that it will not reward profligacy with further bailouts. This would force state governors to live within their means, controlling expenditure and augmenting income by raising revenues, and providing services in return.

In the longer term, solutions abound that look effective and straightforward on paper. The federal allocation formula could be altered to reward better governance. The number of states could be reduced to create more economically sustainable units. The overlap in responsibilities between tiers of government could be eliminated. However, many such measures would require constitutional amendments that are extremely unlikely or well-nigh impossible to implement within Nigeria’s political economy for other reasons.

Less ambitious reforms may be possible. The prudent guidelines on government spending and debt that the Fiscal Responsibility Act requires are only binding on the Federal Government. The same limits and guidelines should apply to state governments to prevent a recurrence of the recent insolvency and bailout. The Debt Management Office should also have increased powers over state government borrowing. Stricter requirements for disclosure of revenue and spending, and the imposition of conditions, would improve state financial management; as would timely, independent audits of state-owned enterprises and the gradual privatisation of such companies. A new initiative, BudgIT (yourbudgit.com), is already making headway in providing the public with budgetary information that enables citizens to monitor the performance of their elected representatives.

The 1999 Constitution Alteration Bill passed by the National Assembly in 2015 included a provision securing the financial autonomy of state assemblies. This would have strengthened the authority of state legislatures over the executive, but other provisions in the Bill led to it being blocked by the outgoing president, Goodluck Jonathan. Legislation is urgently required to ensure that state assemblies cease to be mere appendages of governors.

The Independent National Electoral Commission (INEC) won praise for its conduct of the 2015 presidential election. Biometric identification was used effectively and the commission succeeded in maintaining its independence and integrity under the most testing circumstances. More credible state government elections would make it harder for state governors and their “godfathers” to secure power by fraudulent means.

The abolition of the state electoral commissions appointed by governors would be a step towards improving the autonomy of LGAs. Prof. Ibrahim, a member of the late president Yar’Adua’s Electoral Reform Commission, told ARI that “in every part of the country the commission visited, everyone wanted the LGAs to be elected fairly and democratically because that is the branch of government closest to everyone’s lives”. The task of organising LGA elections should be assigned to INEC. If elected, as opposed to selected, LGAs could be held to account by local voters, demand their federal allocation from state governments and do what they are mandated to do: deliver basic services at grassroots level.
Nigeria’s states are in crisis. But modest improvements in IGR, financial management, conduct of elections, the autonomy of state assemblies and LGAs, and service delivery are readily achievable and would improve the lives of millions of Nigerians.

[message_box align=”right” title=”SOURCES” color=”none”] 1. A fourth region, Mid-Western, was created shortly before the outbreak of the 1967-70 civil war

2. Rotimi Suberu, “Federalism and Ethnic Conflict in Nigeria”, United States Institute of Peace Press, 2001

3. SPARC also set up a state peer-review mechanism under the Nigerian Governors’ Forum (NGF), which reviewed Anambra and Ekiti states before the NGF suspended its meetings in 2013. Independent reviewers found that neither state had held LGA elections or raised adequate IGR, but rated them quite highly otherwise

4. See BudgIT, “The State of States”, 2015, p.63

5. The states have received substantial loans from the AfDB and World Bank

The post State(s) of crisis: sub-national government in Nigeria appeared first on Africa Research Institute.

February 2016

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On 29 January 1986 Yoweri Kaguta Museveni addressed Ugandans for the first time as national leader: “No one should think that what is happening today is a mere change of guard; it is a fundamental change in the politics of our country”. Given that Uganda had been led by seven presidents and a presidential commission in the preceding seven years, few could have expected that Museveni would remain at the helm 30 years later.

The National Resistance Army and its political wing, the National Resistance Movement (NRM), took power after a bush war that began in 1980. The NRM’s ten-point programme, debated and agreed during 1984, sought to “usher in a new and better future for the long-suffering people of Uganda on the back of a grassroots campaign to seize power”. It promised a peaceful, democratic future, free from corruption, and with basic services and economic opportunity for all citizens.

Thirty years on, it has become increasingly difficult to differentiate between the Ugandan state, its dominant political party (the NRM) and its leader (Museveni). On 18 February, Ugandans will vote in presidential and legislative elections. This Briefing Note considers the extent to which the promises of the ten-point programme have been fulfilled.

• Power to the people
• The (NRM) political machine
• Peace at last?
• Sowing the mustard seed
• Community service
• “The chair is sweet”
• More of the same?
• Sources

Power to the people

In 1986 the NRM promised “popular democracy” and began to dismantle Uganda’s political structure. In 1992, political parties were banned, giving rise to a no-party or “movement” system. Museveni said this would provide a platform for more inclusive politics and encourage Ugandans to move beyond divisive tribal rivalries prevalent during the previous three decades.

Devolution of power was a key tenet of NRM policy. Deployed as a strategy for popular engagement during the bush war, in the late 1980s a five-tier system of elected government was rolled out in villages, parishes, sub-counties, counties and districts nationwide. The 1993 Local Government Statute was arguably the most promising reform initiated during the NRM’s early years in power. However, no village or parish elections have taken place since 2001.

A lack of proportionate resources has hampered devolution. By 2013, district authorities were expected to deliver 80% of government services – including primary education, healthcare and urban planning – with just 17% of the national budget. The government acknowledges that more than 30% would be required for local government to operate as envisaged.¹ Despite its early promise, local administration has become more of a political project than a service provider. Since 1986, the number of districts has grown from 30 to 112. The increase in the number of political office holders has not meant more representative governance.

Uganda’s constitution-making process, commenced in 1989, was, at the time, unsurpassed in Africa in terms of civic participation: 25,547 separate submissions were received from citizens, institutions and local councils But by the time the constitution was adopted in 1995, the process “had been manipulated by the NRM to entrench it and its leaders hold on power”. While political and civil rights were provided for and legislative oversight extended, the presidency was invested with “significant powers of appointment”.² Subsequent amendments impinged on the constitutional rights of citizens and parliament, notably the removal of presidential term limits in 2005. To appease critics, less than a month later the government reintroduced a multi-party system.

The (NRM) political machine

Uganda now has many political parties, holds presidential and parliamentary elections every five years, and has a vibrant and critical press. The ninth parliament comprises 386 members, of whom more than one-third are women. The armed forces, youth and the disabled are represented. Vigorous debate is a noted feature of the assembly.

Despite media coverage of huge election rallies and competitive campaigning, electoral participation has dwindled. Turnout for presidential polls, which have returned the same winner four times in a row, fell from 72.6% in 1996 to 59.3% in 2011. Citizens are increasingly convinced that an NRM victory is the only outcome and vote accordingly. The long term legacy of movement-dominated politics, combined with control of state resources and restrictive legislation such as the Public Order Management Act 2013, which outlaws political gatherings of three or more people without prior permission from the police, has stymied genuine opposition to the NRM.

The NRM relies on a strong rural support base to deliver electoral victory. A powerful executive controls the influence of parliament on the legislative agenda and oversight of government expenditure. Internal party divisions have become more noticeable. In 2013, amid “allegations of misbehaviour and insubordination”, the party expelled four MPs who were trying to expose corrupt government officials. However, “young turks” have yet to pose a significant challenge to Museveni’s grip on power.

Peace at last?

In his 2014 independence day address, the president remarked that all Uganda was finally at peace for the first time in 114 years. While the narrative of the NRM as guarantor of peace is grounded in fact, it underplays the persistence of domestic conflict. Military action against the Lord’s Resistance Army affected northern districts for almost two decades, displacing as many as 1.5 million people. Why it took the well-equipped Ugandan People’s Defence Force so long to bring a couple of thousand rebels to heel confounded many. By the time it did so, many northerners could not regard the troops as liberators. The lack of a government or International Criminal Court investigation into alleged abuses on both sides has created a legacy of “negative peace”.³

To some extent, Museveni and the NRM benefited from the protracted conflict. Instability in the north prevented opponents from establishing a power base in the region, were a pretext to curb freedom of expression, and attracted US funding and assistance with training for the security forces. Museveni progressively – and shrewdly – positioned Uganda as a guarantor of regional stability and key ally of the West in the war on terror. The country borders the Democratic Republic of Congo, Rwanda and South Sudan, and has maintained sizeable peacekeeping forces in Somalia. Museveni has consistently turned regional geo-politics to his advantage. In addition to attracting substantial funding, this has deflected censure from donors over issues such as governance and corruption.

Security forces are often deployed against other, non-military threats. They regularly intimidate “dissidents” and opposition figures, with Dr Kizza Besigye a particular target during election campaigns. Museveni’s former physician and long-time political rival, Besigye has frequently been subjected to court indictment, house arrest and physical violence. In 2011, during the “Walk to Work” demonstrations that followed post-election price rises, police tear-gassed and shot at protesters with live ammunition, killing nine people. In riots in Buganda in 2009, security forces killed 20 people and injured more than 50. Stephen Oola, head of research and advocacy at Refugee Law Project, believes “the militarisation of the police is the single biggest insecurity factor in Uganda”.⁴

Crime prevention has been less than successful, with no improvement in statistics since 2009. Ahead of the 2016 elections, Inspector General of Police Kale Kayihura, a key Museveni ally, began the mass recruitment and training of 1.6 million “crime preventers”, 30 for each village nationwide. Recruits are mostly young, unemployed men, who are enticed by the prospect of paid work in the future. Officially, their role is to provide volunteer security services. More often, they intimidate and repress opposition supporters. In 1986 the NRM promised to abolish state-sponsored violence; in 2011 the Uganda Law Society said that the country was increasingly “akin to a police state”.⁵

Sowing the mustard seed ⁶

The ten-point programme described economic development as “probably the most important part”. Uganda has consistently been one of the fastest-growing African economies. Real gross domestic product (GDP) growth averaged 7% a year in the 1990s and 2000s. Sustained growth was a key factor in reducing the number of Ugandans living below the poverty line from 9.8 million in 1992/3 to 6.7 million in 2012/13.

The country’s status as a “donor darling” has underwritten economic growth. In 2013, it received US$1.8bn in official development assistance (ODA), of which the US and the World Bank contributed almost 40%. According to the OECD, ODA accounted for 42% of the government budget in 2006; in 2012/13, it was equivalent to about 25%. After 30 years, the NRM’s stated goal of achieving “self-sustaining economy” remains elusive.

The adoption of externally sponsored structural adjustment programmes during the 1990s made the NRM’s initial plan to promote domestic manufacturing and industrialise agriculture impracticable. Momentum was never regained even after debt relief, which peaked at US$5.9bn in 2006. Up to 80% of Ugandans still depend on subsistence agriculture. Infrastructure spending is skewed in favour of central and western regions, from which all three leading 2016 presidential candidates come. The north, home to one-fifth of the population, has suffered not only from protracted conflict but also dire under-investment in roads, markets and electricity supply.

Following the discovery of an estimated 6.5 billion barrels of oil in the Albertine rift basin, diversification of the economy is possible. Museveni is adamant about the need for the country to build its own oil refinery to generate jobs and promote service industries. But affairs in the oil industry are as opaque as crude prices are low, and characterised by tight presidential and ministerial control, the absence of parliamentary oversight, and a paucity of contract and financial transparency in petroleum legislation.

For formal businesses, leading economic indicators are mixed. Inflation has fallen dramatically since the late 1980s. So too has the value of the national currency. In 1987, one US dollar was worth 45 Ugandan shillings; in 2016, more than 3,000 shillings. Commercial lending rates are high and savings rates low. However, Uganda will not be forced to share the pain of other African economies that over-borrowed from foreign lenders in the current economic cycle. While the currency is unlikely to arrest its long-term decline, Uganda’s debt ratio (around 30% of GDP) and its current account deficit (around 6.5% of GDP) are manageable. Ratings agencies assess the country’s outlook as “stable”.

Community service

The 1995 constitution stipulates that the state must promote equitable development, funding improvements in health care, education, sanitation and housing. The 2015/16 budget set out a 58% rise in development expenditure, to include building 293 primary schools; training 4,000 head teachers; rehabilitating nine major hospitals; building wind-powered irrigation systems in the northern district of Karamoja; and systemic improvements to service delivery. Despite regional variations caused by insecurity – or favouritism – the NRM can plausibly lay claim to important achievements since 1986.

The HIV/AIDS crisis loomed large in the NRM’s early years in power. In 1992 an estimated 18.5% of Ugandans were infected with the virus, one of the highest rates on the continent. By 2005, the figure had been reduced to just 6.4%, showing other afflicted countries what was possible with a concerted effort that combined medical awareness campaigns with consistent availability of drugs. However, the drive to improve health care has faltered. Despite a burgeoning population, total health spending averaged 9.9% of the budget between 2006 and 2013, falling short of the commitment to spend 15% on health care that Uganda made as a signatory to the 2001 Abuja Declaration. The health budget remains dependent on international donors for up to 40% of funding.

The NRM’s initial ambition for education was impressive, but achievements have been mixed. Investment has been consistent as a percentage of GDP (2–3% a year since 2000). Adult literacy improved from 56.1% in 1991 to 78.3% in 2015, with adult female literacy rising by 26.5% to exceed 70%. The NRM introduced universal primary education in 1997 and universal secondary education in 2007. This greatly increased the number of children attending primary school, from 3 to 8 million. However, drop-out rates remain the highest in East Africa. Schools are ill-equipped and overcrowded; teachers’ unions are permanently restive about conditions and pay; and the pressure on the education sector is rising inexorably due to population growth.

In 1986 the ten-point programme aimed to restore and improve social service provision in war-ravaged areas. The Luwero Triangle, an area 75km north of the capital Kampala where the bush war was most fiercely fought, continues to receive a high level of support 30 years later. The legacy of more recent war, insecurity and underdevelopment in the north has yet to be properly addressed. In Karamoja, for example, in 2010 an estimated 82% of inhabitants were living in poverty, literacy rates were just 21% and maternal mortality was double the national average.⁷ A decade after the end of hostilities in the north, the region is home to almost half Uganda’s poor.

The Peace, Recovery and Development Plan, launched in 2008, appeared to be a statement of intent to tackle underdevelopment in the north. So too did the appointment of the president’s wife Janet Museveni as minister for Karamoja affairs. But the shortcomings in public spending on service delivery elsewhere in the country have been replicated – and exaggerated. Roads, health centres, schools and water points have been built, but not in sufficient quantity and not to a sufficiently high standard. The functionality and sustainability of assets has been overlooked: too frequently schools and health facilities are constructed but not adequately equipped, staffed or maintained. A lack of community involvement and awareness at the design stage, and erratic distribution of funds to local administrations, are typical. Widespread deprivation and longstanding grievances remain unaddressed.

“The chair is sweet”⁸

Corruption is “endemic at almost every level of society” despite 30 years of promises to eliminate it.⁹ Although trust in the president has reportedly increased since 2012, people increasingly distrust parliament, the judiciary, state institutions and public officials. Only 26% of Ugandans feel that the government’s response to corruption is “adequate”.¹⁰ Museveni himself acknowledges that embezzlement and abuse of office are problems.

Anti-corruption measures include the Anti-Corruption Act, Enforcement of Leadership Code of Conduct Act, and the Anti-Corruption Court (ACC). Nevertheless, the independence of the judiciary and the state’s willingness to investigate the influential or affluent are questionable. An ACC judge said that his “court is tired of trying tilapias when crocodiles are left swimming”.¹¹

Politics in Uganda is monetised. In 2011 inflation soared to 18.8% compared to 4.1% in 2010, fuelled to a large extent by excessive (pre-election) government spending. The Governor of the Bank of Uganda later admitted that the administration has misled him into printing money for indirect, unspecified expenditures. Despite legal requirements to do so, the NRM made no declaration of campaign spending and allowed no audit of its campaign finances.

In the lead-up to the 2016 elections, MPs have shared US$11.1m to “consult” their constituents. Constituency visits can be very expensive, and many MPs are in debt. Cash hand-outs do not buy votes in Uganda; but a failure to spend gives voters the impression that candidates are looking for their turn “to eat”, not to serve. Indebtedness partly explains the high turnover of MPs. Parliamentary research found that 55% of MPs were not returned in 2011 after serving a term in office.

More of the same?

The difference between Uganda in 1986 and 2016 is profound. The NRM’s 2016–21 manifesto focuses on economic development, tackling corruption, and peace and security. No one can accuse the party of inconsistency in its policy pronouncements. The document is coherent and considered, but the “vision” remains no more than that for most Ugandans. The NRM needs to rediscover its boldness if it is to stay remotely relevant to ordinary Ugandans; but time is not on its side – and its leader may not allow the movement to reinvent itself in his lifetime.

In 1997 Museveni claimed that “there are now people of presidential calibre and capacity who can take over when I retire, and I shall be among the first to back them”.¹² In 2001 he promised that he would retire in 2006, but in 2016 he is seeking a fifth term. Between 40% and 45% of eligible voters have never known another leader. With rumours that the president may anoint his son Muhoozi Kainerugaba as his eventual successor, and with his inner circle increasingly acting like a shadow state, Museveni resembles the African president-for-life stereotype that he was so keen to distance himself from in his 1986 book, What is Africa’s Problem?

Demography is the biggest threat to the progress made under Museveni and the NRM since 1986 – and to Uganda’s very stability. The population is one of the youngest in Africa: 75% of its 35 million citizens are under the age of 30. The formal economy annually creates 9,000 positions, but 400,000 school leavers begin searching for jobs each year. The real unemployment rate is estimated at 64%.¹³ Meanwhile, the laudable performance in poverty reduction over two decades is threatened. The number of “insecure non-poor” has risen sharply in the same period, from 5.8 to 14.7 million – more than 40% of the population.¹⁴

Oil resources and closer regional integration of the East African Community provide Uganda with opportunities that, if shrewdly exploited, could spur structural transformation of the economy, fund more productive development expenditure, and provide more jobs.  The winner of February’s presidential election will be male, over 55, from the west of the country, and a past or present NRM grandee. That much will be no different, but young Ugandans, in particular, urgently need something more than steady progress.

[message_box align=”right” title=”SOURCES” color=”none”]

1. “Getting the most out of local government: Lessons from Uganda”, International Growth Centre,  24 June 2015

2. ARI interview with Nicholas Opiyo, 29 January 2016

3. K. Williams, “The challenge and meaning of justice in northern Uganda”, African Security View 16(1), 2007, pp. 68-83

4. ARI Interview with Stephen Oola, 26 January 2016

5. R. Wanambwa, “Uganda is akin to a police state – Uganda Law Society”, Daily Monitor, 14 April 2011

6. Y. Museveni, Sowing the mustard seed: The struggle for freedom and democracy in Uganda, Moran Publishers, 1997

7. J. Powell, “Karamoja: a literature review”, Saferworld, March 2010

8. “Enno entebe ewooma” – Luganda proverb

9. ARI interview with Nicholas Opiyo, 29 January 2016

10. “Eroded? Institutional trust suffers as perceived corruption increases”, Afrobarometer, 25 September 2015

11. Judge John Bosco quoted in “Letting the Big Fish Swim: Failures to prosecute high-level corruption in Uganda”, Human Rights Watch, 21 October 2013

12. Y. Museveni, Sowing the mustard seed: The struggle for freedom and democracy in Uganda, Moran Publishers, 1997, p. 219

13. “Youth unemployment and job creation in Uganda: Opportunities and challenges”, Advocates for Coalition for Development and Environment, Infosheet 26, 2014, p.2

14. “Poverty Status Report 2014: Structural change and poverty reduction in Uganda”, Ministry of Finance, Planning and Economic Development, November 2014, p.7

The post Steady Progress? 30 years of Museveni and the NRM in Uganda appeared first on Africa Research Institute.

October 2015

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Tanzania’s fifth multi-party elections on 25 October 2015 could mark a watershed in national politics. Former prime minister Edward Lowassa is the flagbearer for Ukawa, an opposition alliance forged during a heated contest over constitutional reform and the structure of the Union. After two terms in office the incumbent president, Jakaya Kikwete, is standing down. While opinion polls indicate that his successor John Magufuli and CCM, the ruling party since 1977, are clear favourites, uncertainty about the intentions of the huge number of young voters and the level of turnout make predictions hazardous. Despite the unresolved battle over constitutional reform, campaigning has eschewed issues of importance to all Tanzanians in favour of an emphasis on personalities, and small-scale promises. This Briefing Note considers the variables in what is likely to be the most keenly contested poll since the first multi-party elections in 1995.

• The katiba controversy
• Enter the ‘big man’
• The fall-out
• CCM’s safe pair of hands
• What’s in it for me?
• Who will vote?
• CCM’s partial eclipse?
• Sources

The katiba controversy

Between July and December 2012, Tanzania’s Constitutional Review Commission (CRC) visited all districts in the United Republic, held 1,773 meetings and received the opinions of 1.4 million citizens, as well as civil society organisations and international experts.¹; The consultation process rekindled nationwide discussion about the degree of autonomy afforded to Zanzibar, land ownership, citizenship, and human rights. Issues, rather than personalities or party politics, were to the fore.

Two drafts of a new katiba, or constitution, were vigorously debated by a constituent assembly in the capital Dodoma during 2014. The main stumbling block – as in the previous two constitutional reviews – was the structure of the Union. Delegates from Chama Cha Mapinduzi (CCM), the ruling party since 1977, steadfastly defended the status quo. Opposition party delegates supported the CRC’s recommendation for a three-tier federal arrangement, adding a new government for the mainland to the existing ones for the Union and the Zanzibar Isles. Despite a boycott by opposition delegates, a draft constitution was narrowly approved by the constituent assembly in October 2014. But a popular referendum on the new katiba scheduled for April 2015 was postponed until after the general election. High politicking supplanted the deliberation of weighty matters that affect the daily lives of all Tanzanians.²

The heavy-handed conduct of CCM in the constituent assembly divided the nation; the decision to defer the referendum left it in constitutional limbo. Four opposition parties found common cause during the katiba review, uniting under the banner of Umoja wa katiba ya Wananchi (Coalition of Defenders of the People’s Constitution) or Ukawa. The alliance has survived the indefinite postponement of a resolution to the constitutional issue.

Despite seemingly incompatible ideological positions, Chama cha Demokrasia na Maendeleo (Chadema), which was established as a pro-business platform and draws its support from northern Tanzania and Dar es Salaam; the Civic United Front (CUF), a liberal party with strong support in Zanzibar and pockets of the coast; the National Convention for Construction and Reform (NCCR-Mageuzi), popular on the shores of Lake Tanganyika; and the National League for Democracy (NLD) have agreed a joint manifesto and endorsed a common list of candidates for the general election. The endurance of Ukawa suggests that the poll will be the most keenly contested since the first multi-party elections in 1995.

Enter the “big man”

Ukawa’s electoral prospects were transformed in July 2015. Former prime minister Edward Lowassa defected from CCM to Chadema, the largest opposition party, after failing to secure CCM’s nomination as its presidential candidate. Lowassa’s exclusion by the ruling party’s Security and Ethics Committee came as a surprise to many. A political heavyweight from Arusha, he is influential, well-connected and able to draw on substantial backing from Asian and Arab businessmen. But his relationship with CCM seldom ran smoothly.

Older Tanzanians recall that Lowassa failed to secure the CCM presidential nomination once before. In 1995 his candidacy was widely thought to have been vetoed by Julius Nyerere himself, founding president of the republic. Benjamin Mkapa, the victor on that occasion, did not offer Lowassa a cabinet post during his first term and only conferred a slot at the Ministry of Water and Livestock in his second. In 2005 Lowassa supported Jakaya Kikwete’s successful bid for the presidency on the tacit – and ultimately mistaken – understanding that the favour would be returned in 2015.

For all his charisma and influence, Lowassa was seemingly considered unsafe by CCM elders. He was tainted by his association with the Richmond Development Company energy corruption scandal that occurred when he was premier and prompted his resignation in 2008. While Lowassa was never prosecuted for any wrongdoing, the episode inspired the nicknames Lo-Rushwa and Fisadi-in-Chief, derived from the Swahili for “bribe” and “corrupt” respectively. His close association with certain businessmen prompts frequent and widespread speculation. “One wonders why he is the ‘magnet’ that attracts such money. More significantly, what if there is ‘pay back time’ if he wins the elections?” asked one commentator in June.³

Chadema’s leader and Ukawa co-chair Freeman Mbowe appeared unperturbed by such questions when courting Lowassa, and speedily ensured that his prize was confirmed as Ukawa’s presidential candidate. The recruitment of Lowassa has entailed compromise. Ukawa was forged to promote ambitious principles and progressive values during the battle to introduce a new constitution. But the coalition is equally determined to win the presidential election and has judged the former prime minister to be the man to deliver victory, despite mutterings of an “integrity deficit”⁴.

Lowassa has proved adaptable. He toed the CCM party line over the katiba as it sought to stymie support for radical changes to the structure of the Union, which might have loosened its grip on power. However, when presented as Ukawa’s candidate he called for the constitutional debate to be reopened. Lowassa’s campaign rallies across the country have drawn vast crowds, partly because he arrives by helicopter. He is presented by Chadema as independently wealthy, a man who has no need of a position in government to enrich himself. This may not matter to voters: 51% of those surveyed by civil society organisation Twaweza in June 2014 asserted that “corruption cannot be controlled at all” in Tanzania.⁵ But for all his apparent popularity, Lowassa’s transfer to Chadema and Ukawa has threatened to fracture the coalition.

The fall-out

Lowassa’s arrival in their midst proved too much for some of Ukawa’s leading figures. CUF national chairman and Ukawa co-chair Prof. Ibrahim Lipumba and Chadema secretary-general Dr Wilbrod Slaa resigned. Both stood for the presidency in 2010 and retained ambitions to occupy the Ikulu, or State House. The two men also have reputations as principled individuals with a strong grasp of policy. Their departure from the election campaign heralded a shift away from programmatic politics, while Lowassa’s ascendancy brought a greater focus on personality.

For Lipumba, the identity of Lowassa’s running mate also touched a nerve. The National Elections Act (2010) requires that candidates for the presidency and vice-presidency come from the same party, with one from the mainland and one from the Isles. Because Ukawa is not formally registered as a political party, Juma Duni Haji – Lipumba’s Zanzibari running mate in the 2005 presidential elections – resigned as CUF’s deputy chair to join Lowassa on the Chadema ticket.

The departure of Lipumba and Duni leaves CUF very much in Chadema’s shadow. Meanwhile, Lowassa and Duni make an unlikely pairing. Duni made his reputation as a vociferous campaigner against CCM hegemony on Zanzibar. His incarceration following a by-election victory in 1997 led to him being listed as a prisoner of conscience by Amnesty International; Lowassa has never been unduly concerned with tensions in the Isles.

At his departing press conference, broadcast live across Tanzania, Slaa launched an uncompromising attack on Lowassa and those thought to be his backers. The former Catholic priest has campaigned tirelessly against corruption and named Lowassa on a “list of shame” in September 2007. Slaa emphasised Lowassa’s failure to honour promises: “I had been told that he was crossing over with about 50 members of parliament and 22 regional party chairmen. In the end, this did not materialise.”⁶ The tirade made headlines for days. It was not the only controversy. The way that Lowassa asked a Lutheran congregation in Tabora to pray for him because the country has never had a president from this protestant denomination has also caused unease in a nation where religion and politics have largely been kept apart.⁷

CCM’s safe pair of hands

Dr John Magufuli may be low profile, but he has never been embroiled in a corruption scandal and, as minister of works, has earned a reputation for being a sound – if occasionally demanding – technocrat, with a detailed knowledge of his brief. Dubbed tingatinga (“bulldozer”) by Kikwete, Magufuli was the safe choice for CCM.

Despite 20 years in government, Magufuli is attempting to position himself as the change candidate, rather than the executor of Kikwete’s legacy. His campaign billboards display only a small CCM logo, in contrast to the green and gold banners that Kikwete used in 2005 and 2010. In at least one respect, Magufuli does represent a break with the status quo. Born in what is now Geita Region, south of Lake Victoria, he is the first CCM presidential candidate from the interior since Nyerere.

Magufuli appears to have more in common with his running mate, Samia Hassan Suluhu, than Lowassa has with Duni. Suluhu is MP for the Zanzibar constituency of Makunduchi and the first female vice-presidential candidate in CCM’s history. As Minister of State for Union Affairs, she personified CCM orthodoxy over Zanzibar; and as deputy chair of the constituent assembly during the katiba review, she frequently attracted the wrath of Ukawa delegates.

CCM has pushed through a flurry of legislation in the run-up to the election, including bills relating to the management of Tanzania’s future, potentially substantial, hydrocarbon revenues. New infrastructure initiatives have been announced. Ukawa, in contrast, has no track record and no access to the machinery of government.

In a June 2015 poll conducted by Twaweza, 46% of respondents listed “policy ideas” as the most important criteria they considered when electing a president.⁸ However, neither the media – with the notable exception of the televised debate series MkikiMkiki – nor campaign rallies carry much meaningful discussion of policy or feasible solutions to widespread poverty, power and infrastructure deficits, and overloaded social services. “The election campaign has been short of serious debate about how to tackle important issues”, Deus Kibamba, the chair of Jukwaa La katiba Tanzania (Constitutional Forum), told ARI.⁹

What’s in it for me?

Whatever people say to pollsters, personalities and party loyalty will inevitably trump policy and issues in the elections. It has always been thus. Magufuli and Suluhu face a tougher campaign on that score than any of their predecessors in CCM. Their public profile was negligible before the campaign started compared to that of their opponents.

What young Tanzanians make of the personalities on show and how they cast their votes will be of critical importance in determining the outcome of this election – and many more to come. The August 2012 census indicates that approximately 55% of Tanzanians were aged 19 or under. Of voters registered for October’s elections, over 60% are under 35 and nearly 80% are under 45.¹⁰ Magufuli is 55 years old, Lowassa 62. Fewer than one in ten Tanzanians are, like them, old enough to remember the formation of the Union in 1964.

On the campaign trail, CCM and opposition parties have made promises to improve local roads and water supply.¹¹ Pecuniary inducements are commonplace during elections. But voters do not forget. In a Twaweza poll conducted in July/August 2015, two-thirds of those surveyed said they were aware of promises made by their MP during the last election, mostly relating to the provision of local infrastructure; nearly half of them indicated that none of the promises had been fulfilled.¹² Voting an MP out of office remains all but impossible in the majority of mainland constituencies due to the clear ascendancy of one party or another. But in 2015, for the first time ever, a united opposition offers voters a presidential candidate with a chance of success.

Twaweza’s July/August 2015 opinion poll refutes the possibility of an opposition victory. About a quarter of respondents said they intended to vote for Lowassa, as opposed to almost two-thirds (65%) for Magufuli. Lowassa’s strongest showing was among urban, young, male and more educated respondents.¹³ Although the poll did not include Zanzibar, and could therefore underestimate support for the opposition, Lowassa’s score was comparable to Slaa’s 25% share of the vote in the 2010 presidential election. It is far short of the 37% polled by all opposition candidates in that contest. This suggests that Lowassa may not be all that non-CCM voters were hoping for from Ukawa. Again, the voting behaviour of the potentially substantial number of first-time voters will be of critical importance. So, too, is turnout.

Who will vote?

Turnout almost halved for presidential elections between 2000 and 2010, falling from 84% to 43% of registered voters. In the same period the size of the electorate doubled from 10 million to 20 million. The figures speak either of immense – and growing – antipathy to a formal political scene dominated by CCM, a failure on the part of CCM to attract new voters, or a combination of the two.

Despite declining turnout, CCM increased its number of votes in presidential elections by 1.2 million between 1995 and 2010 – double the 635,000 combined increase recorded by opposition parties. The ruling party is experienced and skilled at mobilising grassroots structures in rural areas untouched by the opposition. CCM’s past victories, it has been said, “can be attributed more to the regime’s broad social base and organisational power than to the popularity of its policies or the performance of the government.”¹⁴ Kikwete was keenly aware of the need to nurture rural voters, launching a series of agricultural development programmes during his time in office. Three-quarters of Tanzanians derive a livelihood from agriculture. The party’s secretary-general, Abdulrahman Kinana, has carefully cultivated an image of agrarian activity, to differentiate CCM from opposition “city types”.

The opposition share of the presidential vote has fluctuated since 1995 but the 37% achieved in 2010 was similar to the first multi-party elections. Whatever recent polls indicate, the presence of Lowassa as Ukawa’s presidential candidate could plausibly provide a 5% boost by attracting new voters to the opposition. If he and Ukawa can “get out the vote” – by mobilising a large number of young, hitherto disaffected voters – a 10% swing might be achievable, and with it a convincing bid for the presidency. However, a substantial turnout among youth voters is as difficult to achieve in Tanzania as elsewhere.

Ukawa’s appeal to young voters might have been greater had Chadema not expelled Zitto Kabwe, an energetic and plain speaking former chair of the parliamentary accounts committee. Being below the age of 40, Kabwe was ineligible to stand for the presidency under Tanzania’s 1977 constitution, but he founded his own party hoping that a new constitution might enable him to compete. Lacking established grassroots structures, Kabwe’s Alliance for Change and Transparency (ACT-Wazalendo) is unlikely to gain much traction.

CCM’s partial eclipse?

CCM is the clear favourite in the elections. The constituency map is likely to resemble a crescent moon. Seats adjacent to Lake Tanganyika will be split between CCM, NCCR-Mageuzi and ACT-Wazalendo; those in the densely-populated area around Lake Victoria will be shared by Chadema and CCM. Much of the Northern Zone will fall to Chadema, which will also see its vote surge in Dar es Salaam. CUF should take half the seats in Zanzibar, while making inroads in some coastal constituencies. CCM will successfully defend its hegemony in the southern highlands and central zone. The encroachment of the opposition on CCM’s agrarian heartland in previous elections continues.

The fate of Tanzania’s draft constitution, and the future of the coalition that was formed to defend it, is more uncertain. Assuming Ukawa survives the election intact, its leaders and members may not have the inclination or stamina to fight again for radical reform of the katiba. The departure of Lipumba and Slaa has left CUF and Chadema significantly weakened, while NCCR-Mageuzi and NLD may suffer from their electoral association with bigger parties and more prominent political figures.

If Lowassa proves costly to Ukawa in terms of credibility and support, recriminations within the alliance will be vociferous and bitter. To many, an election campaign grounded on points of principle and common grievance about constitutional reform would, with hindsight, appear to have been the shrewd long-term strategy as opposed to an over-ambitious, opportunistic tilt at power entailing erosion of Ukawa’s raison d’être. As Deus Kibamba told ARI, “politicians crossing the floor to join Ukawa did not augur well with the coalition taking a serious position on the constitutional project. Had Professor Lipumba and Dr Slaa remained at the helm, Ukawa’s campaign would have placed a much greater emphasis on the values which united its member parties at the constituent assembly.”¹⁵

Katiba reform appears to be dead and buried. Given Magufuli’s desire to distance himself from Kikwete, one cannot see a plausible reason for him to expend valuable political capital on a constitutional referendum which might only serve to fuel the opposition. He will surely follow the lead of previous residents of the Ikulu, each of whom set aside pursuing the constitutional legacy of their predecessors and started the process anew in their own good time.

For further analysis of the party manifestos, see “Manifestos for Change? 12 observations on the CCM and Chadema documents” and for legislative elections, see “How will Tanzanians vote on Sunday 25 October?” [forthcoming]

[message_box align=”right” title=”SOURCES” color=”none”] 1. Report of East African Consultative Theme on the Tanzania Constitutional Review Process, Kituo Cha Katiba: Eastern Africa Centre for Constitutional Development, Kampala, 2013, pp. 21-22

2. For further details, see Nick Branson, “Party rules: Consolidating power through constitutional reform in Tanzania”, Briefing Note, Africa Research Institute, London, March 2015

3. Chambi Chachage, “Edward Lowassa and the politics of rumour and endorsement”, African Arguments, 5 June 2015

4. Kitila Mkumbo, “Edward Ngoyai Lowassa: Mchapa kazi mwenye nakisi ya uadilifu na falsafa”, Raia Mwema, Dar es Salaam, 17 September 2014

5. “Have more laws, agencies and commitments against corruption made a difference? People’s perceptions of corruption in Tanzania”, Sauti za Wananchi Brief No. 14, Twaweza, Dar es Salaam, August 2014 p. 9

6. Jenerali Ulimwengu, “Wilbroad Slaa throws spanners, Ukawa wheels untouched”, The East African, Nairobi, 5 September 2015

7. Anne Robi, “Lowassa spurned on divisive view”, Daily News, Dar es Salaam, 9 September 2015

8. “Do they know? Data on voter knowledge”, Sauti za Wananchi Brief No. 26, Twaweza, Dar es Salaam, September 2015, p. 2

9. Conversation with the author, 21 September 2015. For further details, see Nick Branson, “Manifestos for Change? 12 observations on the CCM and Chadema documents”, Africa Research Institute website, 1 October 2015

10. “Basic Demographic and Socio-Economic Profile”, National Bureau of Statistics – Tanzania and Office of Chief Government Statistician – Zanzibar, Dar es Salaam, April 2014

11. Nick Branson, “How will Tanzanians vote on Sunday 25 October?”, Africa Research Institute website, [forthcoming]

12. “Let the people speak: Citizens’ views on political leadership”, Sauti za Wananchi Brief No. 27, Twaweza, Dar es Salaam, September 2015, p. 4

13. Ibid. pp. 12-14

14. Tim Kelsall, Business, Politics and the State in Africa: Challenging the Orthodoxies on Growth and Transformation, Zed Books, London, 2013, p. 60

15. Conversation with the author, 21 September 2015
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The post What’s in it for me? Personalities, enticements and party loyalties in Tanzania’s 2015 elections appeared first on Africa Research Institute.

May 2015

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The purpose of the African Development Bank (AfDB), founded in 1964, is to provide capital to alleviate poverty, improve living conditions and spur economic and social development. It is the largest external funder of infrastructure in sub-Saharan Africa.1 Under the astute leadership of Donald Kaberuka, the Bank has demonstrated resilience and ability to co-ordinate appropriate continental responses to external threats. In 2009, a doubling of loan and grant approvals to US$8 billion helped to mitigate the effects on Africa of a global recession. The following year, shareholders approved a threefold increase of the AfDB’s capital base.

The Bank has forged partnerships with the private sector to fund investment in infrastructure, which it regards as the basic requirement to accelerate economic growth and encourage foreign direct investment and regional trade. It has established itself as a leading source of knowledge on development, provider of technical expertise and trusted advocate for the interests of a continent undergoing rapid change and economic growth.

On 27 May, the Board of Governors will elect a new president at its 50th annual meeting. With donor finance static since the global financial crisis, there are constraints in the Bank’s funding model. Its non-African shareholders demand that the Bank take on more complex roles than traditional project lending. With limited resources, the AfDB is being called upon to lead on issues where it either lacks experience or will find it hard to demonstrate success, including the development of post-conflict and fragile states, regional integration, trade negotiation, gender equality, climate change and infectious disease control. Kaberuka’s successor will face a difficult task.

• Back from the brink
• An infrastructure bank with a wider remit
• The Africa50 Infrastructure Fund: project preparation and development
• African Development Bank Group key facts
• Constraints and opportunities

Back from the brink

In the mid-1990s, the AfDB was engulfed by scandal and near-bankruptcy due to bad lending and corruption. Repair of the balance sheet was the main preoccupation during the presidency of Omar Kabbaj. When former Rwandan finance minister Kaberuka succeeded Kabbaj in 2005, the Bank was providing only 6% of total aid to Africa – less than the United Kingdom. Its international standing was low. Some donors questioned its continued existence.

In 2006, a panel of experts convened by the influential Washington-based Center for Global Development recommended that the principal role of the AfDB should be to promote economic growth through private sector development, regional trade integration and better economic management; and that it should specialise in infrastructure development. The advice on major regional and global issues – for example, climate change – was “lead but don’t lend”.²

The backdrop was unpromising. Africa’s economic growth was subdued and the continent had largely been bypassed by a substantial expansion in global trade and investment. Regional integration was a failure. The Bank was in danger of being crowded out by larger, external donors such as the World Bank and European Commission. But Kaberuka’s arrival coincided with a significant improvement in Africa’s economic performance.

Fuelled by demand for its natural resources, growth in South-South trade and the flow of capital from developed to emerging and frontier markets, by 2013 Africa had become the world’s second fastest-growing region. The AfDB benefited substantially from – and built on – this change of fortunes. It returned to its origins as primarily a funder of infrastructure and its 2013-22 strategy articulated a determination to “place the Bank at the centre of Africa’s transformation”.

An infrastructure bank with a wider remit

According to AfDB estimates, Africa requires infrastructure investment of nearly US$100 billion a year for a decade in order to generate broad-based annual average GDP growth of 7%. At present, only half that sum is being spent. Among other projects, the AfDB has co-financed the Kazungula road and rail bridge linking Botswana, Zambia and Zimbabwe; roads from eastern Nigeria to western Cameroon and between the capitals of Mali and Guinea; and the Turkana wind farm in Kenya, the largest of its kind in eastern Africa.

At US$4-5 billion a year, the Bank’s lending meets a fraction of Africa’s infrastructure and development needs. Financing the mega-projects desired by many governments, such as power stations and transport corridors, is not possible alone. “We have to be clever, doing more with less, and so does Africa,” says an AfDB spokesperson. “The only way to make an impact is through partnerships.” Every US$1 the Bank lends to public sector projects helps to raise another US$3 from other donors or private sector investors, a ratio it aims to increase to 1:10.

Partnerships with the private sector and acceleration of regional integration are priorities: private sector lending exceeds US$1.5 billion a year, a tenfold increase since 2006, with energy and transport projects accounting for two-thirds of commitments. Since 2006, the Bank has co-ordinated 50 public-private partnerships (PPPs). It sees its role as one of facilitating private investment by improving the feasibility, and reducing the regulatory and other risks, of projects: risk mitigation lowers borrowing costs. In 2010, it also set up a loan syndication unit, which has lent more than US$4 billion financed by commercial lenders alongside the Bank. Joint funding spreads risk and makes limited resources stretch further: for example, US$373 million was raised for Dakar’s integrated power and transport project, with the AfDB contributing less than 20% of funding.

In its drive to accelerate infrastructure investment, the AfDB has assumed a role in a plethora of initiatives with a similar objective. It is the executing agency for the Programme for Infrastructure Development in Africa, a scheme of the New Partnership for Africa’s Development (NEPAD) Secretariat and African Union Commission for regional and continental infrastructure and services. It is co-financing projects promoted by Power Africa, a US-led plan to add 30,000MW of electricity-generation capacity. Through its Africa50 Infrastructure Fund, the Bank is seeking to channel African currency reserves and savings into infrastructure projects that it is prevented by its AAA credit rating from co-funding directly.

Flexibility is crucial. “We’ve got a client base whose demands are changing rapidly, especially regarding infrastructure finance,” says Kapil Kapoor, AfDB’s director of policy and strategy. Several initiatives have raised the AfDB’s profile as a knowledge bank and advocate for the continent, such as the African Financial Markets Initiative – a “gateway to Africa’s bond markets” – and the African Legal Support Facility. This helps governments to negotiate complex commercial transactions, deal with asset-seizure threats by hostile creditors and build their own expertise in these areas. It is currently advising on more than US$18 billion-worth of transactions, including a recent iron ore deal between the government of Guinea and mining company Rio Tinto.

New and unpredictable demands stretch the Bank’s human and financial resources. It supported Guinea, Liberia and Sierra Leone as they battled to contain the Ebola epidemic, distributing US$223 million to fund nine operations in the region, launching a response fund alongside the African Union, the Economic Commission for Africa and private sector donors, and contributing an additional US$300 million to transport and infrastructure improvement.

In 2015, the Bank is co-ordinating Africa’s stance at the UN Climate Change Conference and on the sustainable development goals, which will determine the global development agenda for the next 15 years. Member countries are being encouraged to include gender equality in all programmes. “We recognise that these issues are vital to development. But the President has said that we cannot do everything, we must act as an honest broker and a catalyst for change,” says a Bank spokesperson.

The Africa50 Infrastructure Fund: project preparation and development

Africa50 was established in 2014 as an African-owned, innovative means of accelerating infrastructure development on the continent. The AfDB provided US$100 million in seed funding and initial staffing. At present, private sector investment in African infrastructure averages US$6 billion a year. Africa50 is aiming to raise equity investment of US$10 billion, an amount which would enable it to leverage up to US$100 billion in debt and equity within Africa and globally.

The initial equity investment will be US$3 billion. “The AfDB will commit US$500 million, another US$500 million will come from African governments and we will do this for two more years until we get an A credit rating,” explains Tas Anvaripour, Africa50’s chief executive. “Then we will issue a bond to African pension and other institutional funds, which will make it easy to scale up and do again. We can get to US$10 billion in a few years.”

Despite its name, Africa50 is “not a fund, it is an infrastructure delivery platform,” says Anvaripour. The focus is on the project preparation and development of high-impact national and regional initiatives in the energy, transport, ICT and water sectors, with a view to increasing their attractiveness to investors. “The capital needed to prepare a project to get it to the development stage is only about 10% of total budget. But the private sector is unwilling to fund it because it’s the most risky phase, and governments don’t have the cash. This is where Africa50 comes in – taking projects to the bankable stage.”

From design to financial closure, project preparation typically takes seven to ten years. Africa50 aims to reduce this to less than three years, thereby facilitating the completion of a critical mass of much-needed projects in the short to medium term.
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African Development Bank Group key facts:

• Established: September 1964 (non-regional members admitted in 1982)
• Main constituent institutions: African Development Bank (ADB), African Development Fund (ADF)
• Authorised capital: Units of Account (UA) 66.98 billion (US$100 billion), of which 60% from regional members, 40% from non-regional members (G7 shareholding: 28%)
• Shareholders: 54 regional, 26 non-regional represented by 20 resident executive directors (13 from regional members, 7 from non-regional members)
• Top ten shareholders: Nigeria (9.3%), USA (6.6%), Japan (5.5%), Egypt (5.4%), South Africa (4.8%), Algeria (4.2%), Germany (4.1%), Libya (4%), Canada (3.8%, France (3.8%)
• 2013 funding approvals: 317 operations, total UA4.39 billion (US$6.5 billion) of which ADB UA1.83 billion (US$2.7 billion) and ADF UA2.27 billion (US$3.4 billion)

Constraints and opportunities

The AfDB’s prudence has protected its AAA credit rating and helped to secure the capital increase in 2010. It also dictates that most lending be allocated to Africa’s 14 middle-income countries; half of its loans are to North Africa. Thirty-four low-income countries are only eligible for about one-third of AfDB resources, through the concessional “window” of the African Development Fund (ADF), which provides grants and interest-free loans. Five countries can access Bank lending and ADF funds.3 In 2004-13, the Bank disbursed approximately US$27 billion to low-income countries through the ADF, substantially funded by non-African member countries, whereas it lent US$36 billion to middle-income countries in the same period. The ADF’s budgeted lending for 2014-16 is US$7.4 billion, a 22% reduction on the previous three year window and equivalent to just US$2.5 billion per annum to address the needs of 39 countries.

The growing mismatch between the AfDB’s structure and the needs of most countries in Africa was highlighted in a recent internal policy review. Strong growth and sound macroeconomic management have enabled many countries to attract commercial loans and foreign direct investment, which now exceed aid as the continent’s main source of finance.4 Some, not all of them in the middle-income category, have been able to access international debt capital markets. Traditional donors no longer hold exclusive sway.

“The Bank has in the last year or two had difficulty finding people to whom it can lend,” a senior representative of a leading shareholder told ARI. “The North Africans have exhausted what they can borrow. Others like Namibia, Botswana and Angola don’t want to borrow from the AfDB. Meanwhile, the ADF’s pot has been declining, so the amount it can give to the poorer countries in concessional funds is quite small – much smaller than the World Bank. This is a problem when the AfDB is claiming to be the main institution on the continent. Some of the poorer countries want to become non-concessional [i.e. commercial-rate] borrowers. But we have to be careful we don’t create bad debtors in Mozambique, Ethiopia and similar countries.”

Bank insiders recognise that its model has to change. It has sought to encourage multilateral donors to invest in fragile and post-conflict states, an area in which it wants to assume a growing role but acknowledges a lack of capacity at present. All multilateral development banks, including the World Bank, are reassessing their relevance. Well-established international finance institutions are being challenged by new institutions like China’s Asian Infrastructure Investment Bank. “No one here will tell you the AfDB is no longer needed, but we can’t go on being generously funded by the international donors,” says a spokesperson.

There are opportunities. Partnerships with private investors and companies keen to invest in African infrastructure and developing economies are one. “Parallel funding” arrangements with sovereign states that cannot increase their investment in the AfDB due to the strictures of its capital structure are another. In January 2014, Japan pledged to double to US$2 billion its support for the AfDB’s Enhanced Private Sector Assistance for Africa initiative, which supports entrepreneurship and job creation. In May 2014, China and the AfDB launched a new 10-year co-financing facility, the Africa Growing Together Fund, to be run alongside the Bank’s existing lending operations.

African central bank reserves, institutional savings and pension funds are further underutilised resources for development. The AfDB is actively encouraging African governments to use their domestic private sector to provide infrastructure through PPPs and other schemes. It has helped to persuade the South African government to increase the amount its pension funds can invest elsewhere in Africa, a move it says will add billions of dollars in continent-wide investment. The Bank is also keen to tap sovereign wealth funds and pension funds globally. “They want good long-term projects and African infrastructure offers many. The trick is to match long-term investors with Africa’s long-term infrastructure needs”, says Kapil Kapoor. “If the projects are seen as too risky, we try to work out how to lessen the risk.”

Governance and a new president

The growing influence of emerging economies has led to pressure to change a governance structure that has altered little since non-African members became shareholders in 1982. Unlike the World Bank and IMF, shareholdings are not based on global economic weighting and remain fixed until the Bank’s next fundraising. “China wants to increase its shareholding and would like to have a permanent executive director – it’s currently in a constituency represented on the board by Canada – but cannot do this until there is a capital increase,” says the senior representative of one shareholder. “India too has a commercial interest in the AfDB and would like to increase its shareholding.”

A new injection of funds is unlikely to occur in the foreseeable future. While it would enable the Bank to lend more to middle-income countries and the large economies of North Africa, it would make no difference to those only eligible for concessional ADF funds. “There is far less of a case for a capital increase in the AfDB than in the Inter-American Development Bank or the Asian Development Bank,” says the shareholder representative, who regards the Bank’s performance as mixed. “The AfDB is generally easier to deal with than the World Bank, but less able to do what it says it will do. Kaberuka hasn’t shown the leadership that we wanted on getting the Bank to deliver results. The African Natural Resources Center in Ghana [established as a non-lending entity to provide expertise to the Bank and member countries] is not up and running. Africa50 is going through teething troubles. There have been so many initiatives, partly as a result of pressure from regional members, to be fair.”

The shareholder representative commends the Bank for “getting to grips with fragile states” and for its role in advocating increased domestic spending on AIDS, tuberculosis and malaria prevention in Africa. “We expect to see more of that”, he adds. “New issues – women, girls and sustainable development – are becoming increasingly important.” As the Bank enters a new era, with its return to its original home in Abidjan, Côte d’Ivoire, this is a reminder that its management has to balance countless, sometimes conflicting – and seemingly increasing – demands from its shareholders and member countries. The shareholders’ 20 executive directors are resident at the Bank’s headquarters, a set-up not replicated by the Asian Development Bank, for example, and one that is unlikely to change.

The outlook for Kaberuka’s successor is more promising than it appeared in 2006, but it is likely to be equally unpredictable. The one-off boost from debt relief is over, as for the time being is the resources boom. Government borrowing is on the rise5 and GDP growth across the continent is slowing as external demand weakens. Job creation, health and education provision, and savings and investment rates have all failed to keep pace with growth. If Africa is to reap a demographic dividend, rather than succumb to a demographic shock, investment must be channelled towards social and infrastructure needs and consolidating growth in low-income economies. Retaining and defining a central role for the AfDB and financing it will require great skill, leadership and improved delivery on the part of its new president over the next decade.

The post Bank to the Future: New Era at the AfDB appeared first on Africa Research Institute.

March 2015

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The basic law – katiba in Swahili – has been the subject of persistent controversy and contestation since the creation of the United Republic of Tanzania in 1964. Despite being presented at the outset with a seemingly unsustainable constitutional settlement, a strong executive has repeatedly deferred and obstructed a radical overhaul of the katiba. The imperative to preserve national unity has often been cited as the pretext. Successive presidents have carefully directed popular participation in reform, restricting it to the confines of the dominant party. The recommendations of legal experts have been routinely ignored, resulting in a series of incoherent, disjointed and sometimes even contradictory constitutional amendments that have failed to address the concerns of citizens and the key issue of the distribution of power. This Briefing Note summarises the history of constitutional reform in Tanzania – a history that renders unsurprising the ruling party’s steadfast response to contemporary demands for a fundamental overhaul of governance.

Click here to view a timeline of constitutional reform in Tanzania

• Two governments, one state
• The party of the revolution, subordination and protest
• Nyalali’s challenge
• From Kisanga to Warioba
• Dividing lines
• Towards a popular referendum

Two governments, one state

Pressure for constitutional reform in Tanzania has been primarily driven by – and repeatedly failed to address – tensions between the nation’s two constituent parts, mainland Tanganyika and the Zanzibar Isles. The 1964 Articles of Union provided for a stopgap constitution modelled on that adopted by Tanganyika in 1962, but required the president to initiate a constitutional review and establish a constituent assembly to debate the draft katiba within one year.

The Union was governed by an “imperial presidency”, with the executive pre-eminent over the legislature. As part of the ostensibly temporary arrangements, it had a dual-government structure rather than being a fully-fledged federation. Julius Nyerere became president of the new United Republic; as president of Zanzibar, Abeid Karume was automatically vice-president. A national assembly, or Bunge, was empowered to enact legislation relating to 11 “Union matters” for both the mainland and the Isles. Zanzibar retained its own executive, legislature, and judicial system for all non-Union matters.

In March 1965, an act of parliament granted the president discretion to commence the constitutional review “at such times as shall be opportune”, overriding the requirement of the Articles of Union. In the meantime, an interim constitution was adopted that formalised a dual-government but single-party system – led by the Tanganyika African National Union (TANU) on the mainland and the Afro-Shirazi Party (ASP) in Zanzibar. President Nyerere prioritised the promotion of national unity and self-reliance over a new katiba, despite this violating his promise upon forming the Union.

The party of the revolution, subordination and protest

In March 1974, faced with popular unrest caused by rising food prices, Nyerere tasked TANU and ASP executive committees with incorporating the doctrines of national unity and self-reliance into the interim constitution. This was the first of many episodes of “hesitant and disjointed”¹ constitutional tinkering, characterised by the application of patches to the basic law as a means of perpetuating the political status quo and consolidating power in the hands of a single party.² Debate was restricted to a joint party conference.

In June 1975, parliament unanimously approved the amendment despite the fact that it made Bunge, the national assembly, subordinate to the executive committees of TANU and ASP. By law, all political activities from then on were to be “conducted by or under the auspices of the party”. The following year, when a national debate on constitutional reform was launched, TANU and ASP local branches ensured that popular participation in the debate was vigilantly overseen and directed. Co-operation between the parties continued at a further joint conference to agree the draft text for a new national constitution and culminated in a merger to form Chama Cha Mapinduzi (CCM), the “party of the revolution”.

In March 1977, Nyerere mandated a 20-person CCM committee to act as the constitutional review commission. Bunge was transformed into a constituent assembly to endorse the new constitution. Twelve years after the adoption of the interim constitution, the imperial presidency and dual-government within a single-party state were enshrined in law. In 1979, Zanzibar adopted a first permanent constitution of its own, based on the new Union model. It provided for a partially-elected House of Representatives, reducing the influence of the Revolutionary Council, an appointed cabinet that had ruled by decree since 1964. It also stipulated that the president of Zanzibar be elected, albeit with a single name on the ballot.

In promulgating the new constitution, Zanzibaris lost their bill of rights, which predated the establishment of the Union. By the early 1980s, calls for a new katiba and a national bill of rights became increasingly voluble and widespread. Popular interest in human rights was fuelled by the language used to mobilise public opinion during the war with neighbouring Uganda in 1978-9; the invasion was justified after the event by accusations of abuses by the regime of Idi Amin. Tanzania was closely involved with the preparation of the 1981 African (Banjul) Charter on Human and People’s Rights. CCM responded by announcing a series of constitutional amendments. Party activists were again deployed to manage popular reactions and debate. The party dictated that the reform process would focus only on the powers of the president; the authority and representative nature of parliament; consolidating the union; and the power of the people.

The legitimacy of the one-party state was openly challenged in some constitutional debates. After Wolfgang Dourado, former attorney general of Zanzibar, questioned the dual-government structure at a seminar organised by the Tanganyika Law Society, he spent 100 days in custody³. In January 1985, the constitutional amendments were enacted. The presidential mandate was restricted to two terms and a system of two vice-presidents was introduced, one being the president of Zanzibar and the other the prime minister of Tanzania. Article 47 stipulated that the president of the United Republic and the first vice-president should come from different parts of the Union. The new provisions came into effect in the run-up to a general election, at which Nyerere stood down in favour of his chosen successor, Ali Hassan Mwinyi.

Nyalali’s challenge

In 1990, the year Nyerere retired as chairman of CCM, he delivered a series of speeches about political change and multi-party democracy that launched a further national debate under the auspices of CCM. President Mwinyi established a steering committee for constitutional reform and a commission, chaired by Chief Justice Francis Nyalali, was charged with assessing how Tanzania might implement multi-party democracy. The commission’s consultative meetings, of which more than 1,000 were held nationwide, attracted genuine popular interest and participation.

In his report to the president and CCM leadership, Nyalali called for a repeal of the 1977 constitution as well as 40 laws identified as being contrary to democratic principles and human rights. He recommended that a constitutional commission draft a new katiba with considerably reduced presidential powers; that this document be subject to a free and open public debate and a popular referendum; and that Tanzania embark upon a major public education programme on multi-party politics and democracy. However, parliament was not allowed to debate the Nyalali Commission report, and the executive largely ignored its recommendations. Instead, in February 1992 a CCM conference decided which of Nyalali’s proposals were acceptable. Among the laws the party failed to repeal was the 1962 Preventive Detention Act, a favoured tool of the Nyerere state.

Constitutional amendments were drafted with a view to entrenching CCM’s dominance in the multi-party era. For example, CCM was exempted from new rules regarding the registration of political parties⁴. Party leaders were given the power to dismiss elected representatives in parliament and replace them at will, strengthening the authority of the political parties at the expense of the United Republic’s institutions. Before the first multi-party elections could be held, the High Court ruled that preventing independent candidates from standing for election to the presidency, parliament and local councils violated constitutional provisions for freedom of association and political participation. In response, parliament passed an amendment stipulating that political participation had to be through a political party. Measures were also taken to mitigate the possibility of a “cohabitation” government, whereby a CCM president of the Union could be deputised by an opposition leader from Zanzibar. This was a genuine risk, underscored by closely contested elections in the Isles in October 1995 that saw the opposition Civic United Front (CUF) come very close to clinching victory.

From Kisanga to Warioba

In July 1998, Tanzania’s third president, Benjamin Mkapa, appointed a new constitutional reform committee, chaired by appeal court judge Robert Kisanga. Mkapa failed to consult the political opposition or civil society on the scope of the review, but gave Kisanga the mandate to consider a wider range of issues than Nyalali. These included the structure of the Union; powers of the executive; the voting system; independent candidacy; and human rights. The committee sought the views of more than half a million Tanzanians from across the country, but the ruling party was again active in “organising opinion they favoured”.⁵

CCM’s efforts did not prevent Kisanga’s 800-page report from including a recommendation that the United Republic should have three governments – for Union matters, the mainland and the Isles. President Mkapa was the first to publicly attack this counsel and insisted that it would have to be approved by CCM committees before being debated in the National Assembly. A 13th amendment to the 1977 constitution implemented some of Kisanga’s recommendations. The number of special seats reserved for women and minorities was increased, but so too was the authority of the president.

In 2011, Jakaya Kikwete, Tanzania’s fourth president, announced his intention to emulate his predecessors with a constitutional review. The diplomatic corps, assembled at the annual New Year Sherry Party, were told by the president that “the people of Tanzania will be fully involved in the process and ultimately, they will be the one to decide.”⁶ Fifteen months later he appointed a 30-member Constitutional Review Commission (CRC), chaired by Joseph Warioba, a former prime minister and attorney general of Tanzania. Between July and December 2012, the CRC visited all districts in the United Republic, held 1,773 meetings and received the opinions of 1.4 million citizens as well as civil society organisations and international experts.⁷

Further popular consultation was organised at ward level through constitutional councils, or baraza. On the mainland, CCM maintained its control over the process by using its dominance of ward development committees (WDCs) to screen those applying to join the councils. Civil society was permitted to convene its own meetings, although some observers noted restrictions on individuals and organisations. Despite the machinations of the ruling party, ever keen to preserve the status quo, the majority of those consulted on the mainland maintained that they should have an assembly and government of their own, as Zanzibar does.

Dividing lines

The commission released its final draft in December 2013, for consideration by a constituent assembly. Chaired by Samuel Sitta, former Speaker of Bunge, the assembly comprised 640 members: all 357 members of the Union parliament, 82 members of the Zanzibar House of Representatives and 201 civil society delegates. Endorsement of a constitutional text required a two-thirds majority among delegates from both Zanzibar and the mainland before the text could be put to a popular referendum. CCM representatives occupied just under half of the seats.

After scrutinising the draft, delegates promptly agreed that a new constitution must provide for an independent electoral commission and permit legal challenges to presidential election results. There was no consensus regarding the percentage of votes required for victory by presidential aspirants or permitting independent candidates to compete for the highest office. Similarly, opinion was divided over the CRC’s proposals to restrict MPs to serving three five-year terms and provide for their recall from parliament by the electorate in the event of malfeasance.

The main stumbling block – as ever – was the structure of the Union. CCM members steadfastly defended the status quo; opposition party members supported the CRC’s recommendation for a three-tier federal government. To advance their agenda, representatives of the three largest opposition parties – Chama Cha Demokrasia Na Maendeleo (Chadema), CUF, and the National Convention for Construction and Reform (NCCR) joined with delegates from civil society to form the Coalition of Defenders of the People’s Constitution, or Umoja wa Katiba ya Wananchi (Ukawa). In March 2014, Ukawa’s secretary claimed a membership of 286 delegates – a number high enough to enable the opposition to block approval of a constitution that failed to reform the government structure.

In April 2014, Ukawa announced that it was boycotting the constituent assembly until its grievances about the apparent rejection of key recommendations of the CRC were heard. Deadlock ensued until September, when President Kikwete met with opposition parties and promised that the assembly would be suspended on 4 October. However, Samuel Sitta, the assembly’s chairman, determined that it should press on with its business despite the pending suspension. Legislative provisions were amended to permit electronic voting by absent delegates, and provisions for a secret ballot were removed, thereby ensuring that CCM elected representatives towed the party line or risked losing their parliamentary seats.⁸ With the October deadline just days away, Sitta presided over a final sitting of the assembly that voted to adopt the draft constitution.

Outraged members of the opposition disputed the legality of the assembly’s proceedings, questioning the vote among delegates from Zanzibar in particular. The deputy clerk, Dr Thomas Kashililah, countered that 147 Zanzibar delegates had voted in favour – a single vote more than the two-thirds majority required. Ambar Khamis, an opposition politician from Zanzibar, claimed that a “yes” vote had been recorded for him despite his absence from the assembly since April. Zazia Meghji, a former finance minister who held a mainland seat, was listed as a representative of Zanzibar. Ukawa stalwarts accused CCM of bribing delegates to vote for a constitution that safeguarded continuity rather than promising change in the structure of the Union.

In Zanzibar, Attorney General Othman Masoud Othman was summarily dismissed for voting against three chapters of the draft constitution, including the one enshrining changes to the structure of the Union – a sacking that threatened to destabilise Zanzibar’s Government of National Unity, formed in 2010. Minister for Constitutional Affairs and Justice Abubakar Khamis Abubakar opposed the move to amend the Isles’ constitution to bring it into line with the proposed Union constitution.

Towards a popular referendum

Despite opposition protest, the government scheduled a referendum on adopting the new constitution for 30 April 2015, with one month of campaigning permitted. This contravened the advice of the National Electoral Commission (NEC), which maintained that the timeframe was overly ambitious. The NEC is legally obliged to educate the public about the draft constitution and the significance of the vote, yet copies of the text only began circulating in February 2015.

The haste to stage the referendum has been interpreted as an attempt by President Kikwete to prevent any judicial challenge to the vote and gain decisive “leverage on the process – and perhaps even the outcome.”⁹ Prime Minister Mizengo Pinda, eager for the president’s endorsement as his chosen successor, is also keen for Kikwete to leave a constitutional legacy. Meanwhile, uncertainty over the feasibility and outcome of the referendum is fuelling wider disquiet in the run-up to the general election in October 2015.

Politics has become increasingly polarised. In November 2014, youth aligned to CCM disrupted a public meeting where constitutional commissioners, including Justice Warioba, attempted to speak about the shortcomings of the proposed katiba. Intolerance of dissent has seemingly galvanised ties between the main opposition parties: Ukawa plans to field a single presidential candidate in October.

Drawing inspiration from the Orange Democratic Movement (ODM) formed during Kenya’s 2005 constitutional referendum, the opposition is first seeking to deprive the referendum of its legitimacy and President Kikwete of his legacy. Ukawa has criticised delays and shortcomings in the preparations to deploy biometric voter registration for the first time. A flawed registration process would disenfranchise voters and undermine the credibility of both the referendum and elections. As if recognising that fighting a referendum campaign and a general election within six months might overstretch its resources and stamina, Ukawa has threatened to boycott the referendum.

If the constitutional referendum goes ahead on 30 April, polling stations are unlikely to witness long queues of eager voters. Turnout for general elections fell from 72% in 2005 to 43% in 2010. Only 40% of the electorate registered for local government elections in December 2014. With the contents of the proposed constitution still unfamiliar to most citizens, the outcome could well be determined less by ordinary Tanzanians and more by the ability of the government and, if it participates, the opposition to mobilise their core supporters. With the katiba requiring a 50% popular endorsement on both the mainland and in Zanzibar to become law, the Isles could yet prove decisive. There, the House of Representatives must ratify any changes to the constitution by a two-thirds majority.¹⁰ As CUF hold 31 of the 82 seats, this requirement poses a significant obstacle to CCM’s plans.

While a defeat of CCM in the October elections is highly unlikely, the handling of the constitutional review process has generated significant antagonism. Opposition parties have found common cause in denouncing the ruling party’s resolute defence of the political status quo. Even if the referendum proceeds, politicking will have undermined the stature and popular espousal of the new constitution. President Kikwete will claim a constitutional legacy regardless. If the referendum is postponed, and it is left to his successor to revisit the constitutional question, the widely acclaimed draft proposed by the Warioba Commission would be a sound start point for the task. In the meantime, the constitutional controversy will ensure that Tanzania’s general election is the most keenly contested since the restoration of multi-party politics in 1992.

Nick Branson is Senior Researcher at Africa Research Institute

2. Inconsequential constitutional amendments have been referred to as “patches” or viraka. See Chris Maina Peter, “Constitution Making Process in Tanzania: the Role of Civil Organisations – A Case Study prepared for the Civil Society and Governance in East Africa Project”, Dar es Salaam, December 1999, p.11

3. Chris Maina Peter, “Civil Society and Constitution Making in Tanzania: A Tall Order”, in Civil Society and Constitutional Reform in Africa, Mwengo, Harare, Zimbabwe (2014), p. 109

4. Mohabe Nyirabu, “The Multiparty Reform Process in Tanzania: The Dominance of the Ruling Party”, African Journal of Political Science, Volume 7, Number 2 (2002), p.104

5. Mohammed A. Bakari, “The Union Between Tanganyika and Zanzibar Revisited”, in Ulf Engel, Gero Erdmann, and Andreas Mehler (eds.) Tanzania Revisited: Political Stability, Aid Dependency, and Development Constraints, Institute of African Affairs, Hamburg (2000), p.145

6. “The President’s Sherry Party speech”, Dar es Salaam, 7 January 2011

7. Report of East African Consultative Theme on the Tanzania Constitutional Review Process, Kituo Cha Katiba: Eastern Africa Centre for Constitutional Development, Kampala, Uganda (2013), pp.21-22

8. Pesa Times, “CA to use both open and secret ballot”, 29 March 2014

9. Salma Maoulidi, “Proposed Constitution: Jinx or Providence?”, The Citizen, 31 December 2014

10. See Article 80 (ii) of the Constitution of Zanzibar [/message_box]

The post Party rules: Consolidating power through constitutional reform in Tanzania appeared first on Africa Research Institute.

 May 2013

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The 1994 pledge by the African National Congress (ANC) to transfer 30% of white-owned agricultural land to black farmers has been undermined by a lack of political will and financial commitment. Other policy priorities have taken precedence over land and agrarian reform. While millions of hectares have been transferred, acute poverty and unemployment are rife in rural areas. These notes assess the progress of the land reform programme and emphasise the importance of – and opportunity in – a bolder approach to this emotive issue.

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• Implementation of land reform complicated by multiple objectives, inadequate funding
• Food self-sufficiency equated with large-scale commercial farming, hampers agrarian reform
• Precarious tenure rights symptomatic of wider economic and social inequalities
• Much redistributed land deemed no longer productive, insufficient support for beneficiaries
• Potential of smallholders under-exploited, rural unemployment at 52%
• Land reform a significant political and economic opportunity for ANC

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Centenary of dispossession

In 2013, South Africa marked the centenary of Act No. 27 – the Natives’ Land Act. This effectively excluded “members of an aboriginal race or tribe of Africa” from occupation or ownership of about 90% of the country’s land. Under the Act, and more than 17,000 subsequent pieces of legislation, many millions were forcibly relocated to black townships and “Bantustan” homelands – an estimated 3.5m people in 1960-80 alone. In 1996, two years after the end of apartheid, some 60,000 white commercial farmers owned almost 70% of land classified as agricultural and leased a further 19% (1).

A land reform programme initiated by the ANC-led government targeted the redress of historical injustices, more equitable distribution of agricultural land, and rural development. About 13m hectares are classed as arable in South Africa. Two-thirds of the land mass is suitable only for livestock farming. By May 2012, ownership of 7.95m hectares of land had been transferred under the programme – about one third of the original target of 24.6m hectares (2). From the outset, implementation of land reform was complicated by the multiple objectives of its three pillars – restitution, redistribution and tenure reform.

The government has been criticised for the slow progress of land redistribution and high cost of land restitution. Both are attributed to the now abandoned willing seller, willing buyer (WSWB) principle. In the absence of compulsion, most landowners have been reluctant to sell to the state. Collusion between sellers, land valuers and government officials – and instances of corruption – have inflated market prices. Furthermore, purchased land has been widely scattered and often unsuitable for beneficiaries.

Redistribution based on WSWB has done little to diminish landlessness, tenure insecurity or rural poverty. Complex legal issues further hampered the progress of land reform. Section 25 of the constitution both guarantees secure property rights and obliges the state to “enable citizens to gain access to land on an equitable basis”. The ANC government also has to maintain its appeal with core voters and investors alike. An estimated 62% of the population is urban. Food self-sufficiency is a paramount objective, yet agriculture generates only 3% of South Africa’s gross domestic product. While land dispossession was a historical event, solutions must be found amid the economic and social realities of contemporary South Africa.

Land reform featured prominently in the negotiations that brought an end to apartheid and endures in ANC rhetoric. In 2013, the original 1999 deadline for the redistribution of 30% of agricultural land to black South Africans was again postponed – from 2014 to 2025. In no year has more than 1% of the national budget been earmarked for purchasing land (3). According to the Department of Rural Development and Land Reform (RDLR), an estimated R29.7 billion (US$3.2 billion) was spent on the land reform programme between 1994 and 2013.4 This may far exceed the sum originally envisaged by the World Bank but it is equivalent to only a single year’s government budget for housing development. The land issue has been described as “broadly only an agenda item” (5).

Restitution, tenure reform…

The 1994 Restitution of Land Rights Act initiated the process of compensating those deprived of property as a result of racist legislation after 1913. By 2013, 77,148 claims had been settled nationwide. In response to appeals from claimants who missed the December 1998 deadline, new claims will be considered. The programme may also be extended to include pre-1913 dispossessions from, among others, the Khoi and San communities in Northern Cape province.

More than 80% of restitution claims settled by 2006 related to urban land. A vast majority of beneficiaries – 92% – opted to receive financial compensation at a cost of R6 billion (US$652m). To satisfy successful claimants demanding the return of land, 1.44m hectares were acquired for an estimated R10.8 billion (US$1.2 billion).6 Given the need to reclaim specific areas of historical and cultural significance, the state’s bargaining power was limited. “The numbers clearly show who has benefited from the [land restitution] programme observed RDLR Minister Gugile Nkwinti (7).

[quote align=”center” color=”#999999″]“The programme of reversing land dispossession must be undertaken in a manner that corrects the injustice while also promoting agricultural stability and food security” – Jacob Zuma, President of South Africa[/quote]

Legislation designed to improve rights of tenure has been ineffective. For most rural South Africans, security of tenure remains precarious. In 1994-2004, an estimated 942,303 people were forcibly removed from commercial farms – one quarter more than in the final decade of apartheid.8 The 1996 Land Reform (Labour Tenants) Act and the 1997 Extension of Security of Tenure Act (ESTA), which were drafted to strengthen the rights of farm workers and others residing on private land, have been poorly enforced by the police and courts. The creation of “agrivillages” for farm dwellers, proposed by a new Land Tenure Security Bill, is redolent of apartheid legislation.

The 2004 Communal Land Rights Act (CLaRA) aimed to transfer the legal power for determining – or altering – myriad land tenure arrangements in communal areas from the state to traditional authorities. If implemented, the legislation would have affected about 21 million people (9). CLaRA attracted widespread criticism for entrenching pre-1994 homeland boundaries and vesting power in unelected local authorities. In May 2010, CLaRA was declared unconstitutional. The 2011 Green Paper on Land Reform stated that land rights in communal areas would be clarified – but no time frame was given.

… and redistribution

By 2013, 4.12m hectares had been redistributed from white ownership to 230,886 black farmers and entrepreneurs at a cost of R12.9 billion (US$1.4 billion).10 Since 1994, the means by which land was redistributed have evolved from Settlement/Land Acquisition Grants (SLAG, 1995-2000) to the Land Redistribution for Agricultural Development Programme (LRAD, 2001-10). In 2006, the government adopted the Pro-active Land Acquisition Strategy (PLAS), which leases high-potential land to chosen beneficiaries with the option of future purchase. Since the early 2000s, the distribution of grants and land allocations has attested to a clear governmental preference for preserving large-scale commercial farming.

The structure of grants and an insistence on maintaining the original boundaries of transferred farms have fostered Communal Property Associations (CPAs). The necessity to pool financial resources has also spawned “rent-a-crowd” CPAs, with members who have no intention of participating actively in farming. Conflicts within CPAs over how land should be used have contributed to the collapse of numerous projects. In practice, few beneficiaries farm collectively.

Assisted purchases of entire farms by individuals or families are rare. Such applications require proof of substantial capital. In areas of highly mechanised commercial agriculture, partnerships with private investors – based on shared equity or outgrower schemes – are promoted as a way of incorporating black South Africans. Such alliances have been depicted as unequal – an opportunity for white farmers and corporations to spread the risk of capital-intensive farming and gain political credibility (11).

In 2010, 90% of redistributed land was deemed “no longer productive” by the government.12 Success or failure tends to be assessed by comparison to the former function of the land. Very few new landowners possess the working capital, skills and machinery to sustain a large commercial farm – or even part of one. Inadequate support and extension services and the imposition of inappropriate business plans compromise government objectives. The state has paid insufficient attention to the diverse profiles and needs of beneficiaries. Despite the many hindrances, a study of new farmers on redistributed land pre-2006 showed that more than half were earning income from agriculture (13).

Alterations to land reform proposed in the long-awaited 2011 Green Paper included a new four-tier structure of land tenure. The response to the Green Paper was muted. Its 11 pages failed to outline practical measures to address existing problems. The government hopes that a draft expropriation bill, and the introduction of land ceilings and a valuergeneral, will speed up land transfers and prevent inflation of land prices. Critics predict more red tape, lengthy legal challenges from landowners – and the alienation of commercial farmers. The state itself cannot provide much extra land. In 2013, completion of a land audit established that 78% of South African land is private and 22% state-owned. The RDLR blamed the inability to provide further, much-needed detail on an “institutional challenge” (14).

Big farms, small farms, more jobs

Rural development was a principal objective of the land reform programme articulated in the 1994 White Paper on Reconstruction and Development. Significant support for diversified smallholder agriculture was envisaged. Making more land available to smallholders is only one component of a broader policy required to diversify and strengthen South African agriculture.

Despite frequent claims to support smallholders, the emphasis of government has been on trying to graft new owners of redistributed land to existing commercial units. Successive administrations have equated national food security with large-scale commercial farming. Concerns about triggering higher or more volatile food prices by undermining the agricultural status quo loom large among policymakers – and are amplified by commercial farmers’ associations. This fixation does little to alleviate rural poverty.

A vibrant smallholder sector would bolster food security at national and household levels – and improve rural livelihoods. South Africa may be food self-sufficient and a net exporter of comestibles, but an estimated 39% of households live on less than US$45 a month and the poor spend at least 40% of their income on food. Food security is attained by growing enough to meet the needs of the family – or by generating adequate income with which to buy food. Farmers are failing for lack of technical support, irrigation, credit, infrastructure and access to markets – not because of the size of their landholdings.

The productive potential of some four million black farmers, most within the former homelands, remains underexploited. Since 2010, the government has invested R1.8bn (US$196m) to assist new famers improve productivity. The Comprehensive Rural Development Programme (CRDP) aims to roll out 160 sites by 2014. While such commitments are laudable, they are insufficient. In contrast to the requirement of the Comprehensive African Agriculture Development Plan for countries to spend at least 10% of their budgets on agriculture, South Africa allocates just 2% to the sector – among the lowest on the continent.

[quote align=”center” color=”#0000012″]“The land question must be resolved, if needs be the hard way” – Julius Malema, former president of ANC Youth League, quoting Oliver Thambo[/quote]

At present, rural job creation – to supplement or provide alternatives to inadequate farm incomes – is equally deficient. The 2011 National Development Plan targets the creation of almost one million agriculture-related jobs by 2030. Between September 2006 and September 2012, the number of South Africans employed in agriculture fell from 1.09 million to 661,000.15 At 52%, the rural unemployment rate is twice the national average.

Responsibility for realising the potential of existing smallholders and beneficiaries of land reform lies with commercial farmers as well as the government. The expansion of mentoring and other initiatives to improve local relationships are essential. But large-scale commercial farms are no “golden goose”. As subsidies were removed and input costs rose, profitability diminished. The number of commercial farmers has declined from about 60,000 in 1994 to under 40,000 – half of whom generate annual turnover of less than R300,000 (US$32,000). The future of South African agriculture will depend on both the preservation of profitable commercial farming and an effective transformation of the smallholder sector.

Politics and populism

Many judgements regarding the success or failure of land reform focus on the number of hectares transferred. This obscures the crucial point that the purpose of land reform was the redress of historical injustice, redistribution of wealth and transformation of rural livelihoods. All of these need more ingredients to succeed than shuffled hectares.

Against the backdrop of subdued economic growth and widespread industrial unrest in 2012, a wholesale restructuring of the agricultural economy is required. This could reasonably be expected to take more than a generation to achieve. The transfer of 7.95m hectares is itself, arguably, no insignificant feat. But more money, greater political will and more skilful implementation are required to counter allegations that land and agrarian reform are merely agenda items.

Competing policy priorities have taken precedence over land reform – and agriculture – since 1994. The achievements of the ANC government are many and significant. The economy remains the largest in Africa. Social grants are received by more than 15m people and will rise to R120 billion (US$13 billion) annually by 2015. Four million new houses have been constructed. A massive infrastructure programme is under way. By contrast, the allocation of 2% of the national budget to agriculture, rural development and land reform for 2013-14 is a paltry sum.

Despite impassioned rhetoric to the contrary, the timidity with which successive ANC administrations have addressed rural development is striking. This lack of political will has multiple justifications. The contribution of agriculture to GDP is small. Concerns of rural voters in a country with an urbanisation level of 62% are of secondary political importance. The ANC’s substantial parliamentary majority gives it a mandate for bolder action in the agriculture sector, which could bolster rural support for the party. Agriculture is a prime source of income for as many as five million people and their dependants. Their votes cannot be taken for granted.

The undertaking to create a million agriculture-related jobs by 2030 might suggest that the ANC recognises the opportunity in agriculture. In the absence of greater financial commitment and political resolve, meandering land and agrarian reform will become increasingly susceptible to political opportunism. Under the leadership of Julius Malema, the ANC’s Youth League made expropriation of white-owned land without compensation one of its main rallying calls. The pre-emption of populist successors to Malema – from whatever quarter – is imperative for rural economic development, stability and social cohesion in South Africa.

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