The meeting was convened at SOAS by Ayan Mahamoud MBE, head of the Somaliland Mission to the UK, and was chaired by Edward Paice, ARI’s director.

The post Decolonisation in Somaliland in July 1960 in historical perspective – Prof Ahmed I Samatar appeared first on Africa Research Institute.

Further reading:

“International observers of Somaliland presidential election congratulate Somaliland as Supreme Court announces final result” (Somaliland Focus, 29 November 2017)

“International observers of Somaliland’s presidential election urge all parties to use legal channels to resolve post-election differences” (Somaliland Focus, 17 November 2017)

“International observers of Somaliland’s presidential election congratulate the Somaliland people on a peaceful poll and look forward to a peaceful conclusion to the electoral process” (16 November 2017)

“SONSAF, Domestic Observers Certify Presidential Election on Monday Concluded Faultlessly” (SomTribune, 15 November)

“Somaliland Votes next week. Its biggest challenges come after the election” (Scott Pegg and Michael Walls, Washington Post Monkey Cage, 10 November 2017)

“Q & A session with HE Dr Sa’ad Shire, Minister of Foreign Affairs, Somaliland” (Africa Research Institute, April 2017)

“Report by International Observers on the 2016 Voter Registration Process in Somaliland” (March 2017)

“Voter Behaviour in Somaliland” (Academy for Peace and Development/ Interpeace December 2016)

“The Economics of Elections in Somaliland: The financing of political parties and candidates” (Rift Valley Institute, 2015)

“Statebuilding in the Somali Horn” (Michael Walls/ Africa Research Institute, December 2014)

The post Somaliland’s 2017 presidential election: interview with Dr Michael Walls appeared first on Africa Research Institute.

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The post Interactive Timeline: IPTL, Richmond and “Escrow” appeared first on Africa Research Institute.

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.

Podcast

Further Reading

“Cameroon’s descent into crisis: the long history of anglophone discord” (IRIN, 4 October 2017)

“Cameroon’s Anglophone crisis isn’t about language, but economic deprivation” (Amindeh Blaise Atabong, Quartz Africa, 9 October 2017)

“Cameroon: A Worsening Anglophone Crisis Calls for Strong Measures” (Crisis Group Africa Briefing No. 130, 19 October 2017)

“The Anglophone Dilemma in Cameroon” (Ateki Seta Caxton, ACCORD Conflict Trends, Issue 2, 2017)

“Cameroon’s Anglophone Crisis at the Crossroads” (Crisis Group Africa Report No. 250, 2 August 2017)

“Cameroon and the tumultuous autumn of an African patriarch” (FT View, 28 March 2017)

The post Interview with Nkongho Felix Agbor Balla by Edward Paice appeared first on Africa Research Institute.

On Wednesday 28 June we were joined by three speakers to discuss the state of the media, land matters and the economy, ahead of the August 8th election.

Kwame Owino is chief executive officer of the Institute of Economic Affairs (Kenya).

Ambreena Manji is Professor of Land Law and Development at Cardiff University and former director of the British Institute in East Africa. She is the author of ARI Counterpoint ‘Whose land is it anyway: The failure of land law in Kenya‘

Denis Galava is a former Managing Editor of the Nation Media Group.

The event marked the launch of “How Kenya is failing to create decent jobs” by Kwame Owino, Ivory Ndekei and Noah Wamalwa”.

The interview with Denis Galava featured in the event is separately available here as well.

Podcast

The post The State of Kenya appeared first on Africa Research Institute.

This September, the UN General Assembly dedicated a high-level meeting to the situation in Mali. This was the fifth general assembly since a Tuareg separatist rebellion and a military coup d’état destabilised Mali in the first quarter of 2012. The international community has focused its attention on the persistent presence of jihadists in the country, and across the Sahel. Many believed that the election of Ibrahim Boubacar Keïta (IBK) as president in August 2013 would prompt a quick recovery. Yet IBK has failed to provide the necessary leadership, occupying himself with superficial ministerial reshuffles and overt nepotism, turning a blind eye to escalating levels of corruption. His inaction may inflict greater damage to Mali than the jihadist threat.

Beyond security

At the UN meeting, officials from the European Union, African Union, regional bloc ECOWAS and the UN itself reaffirmed their commitment to resolving entwined security and political crises. IBK reiterated the threats posed by al-Qaeda and Islamic State-affiliated groups both to his country and the Sahel. Although the risk is real, external interested parties should be wary of loaded rhetoric. For anyone seeking to understand what is happening in Mali, a security bias is not only erroneous but dangerous.

The jihadist threat narrative has obscured a proper assessment of the Malian government’s performance and its ability to deliver basic public services and create jobs. Poor health infrastructure, high levels of youth unemployment and endemic corruption need to be addressed. If they are not, these shortcomings could have deeper and longer-term influence for the stability of Mali. The spotlight needs to be turned the spotlight on key governance institutions such as the Bureau du Vérificateur Général” (National Corruption Commission) as part of a concerted push for reforms.

Concerns from afar

Mali has retained close ties with France since independence in 1960. The Malian diaspora is one of the largest in France. Born in France to Malian parents, I personify this link. But I, like many others in the diaspora, was concerned by the recent pronouncements of former French president Nicolas Sarkozy when he declared that he did not quite understand France’s military operation in Mali. Operation Serval began in 2013 to liberate northern Mali from the jihadists. Sarkozy questioned how 3,000 soldiers could have a significant impact across such a vast area.

Perhaps Sarkozy meant to imply that the French contingent currently stationed in the country cannot do the job alone. France has a key role to play in supporting the resolution of Mali’s political and security quagmire, but Malians need to be at the forefront of an indigenous effort to resolve the crises. However, this has so far proved less than straightforward.

Slow progress

Three years into IBK’s regime, demonstrations against bad governance have become a regular occurrence throughout the country. In May 2016, scores of protesters came together to denounce high levels of corruption and express their disappointment with the rule of a man who was elected with 77.6% of the popular vote in 2013. Several opposition figures attended the protest and lambasted the government for not addressing the growing economic misery and social suffering. Two months later, youth from Gao, Timbuktu and Bamako came together to protest that the 200,000 jobs promised by IBK during the presidential campaign had not yet been created. Issa Karounga Keita, President of the Executive Bureau of TRIJEUD, a Malian youth civil society group, raised similar concerns when I spoke with him last week: “job insecurity in Mali particularly affects the youth. Malian youth, when and if they are lucky enough to get a job, are underpaid, undertrained and underestimated”. The longer the IBK regime is unable to improve the living conditions for ordinary Malians, the more potent the threat from disenchanted youth to peace and security.

Poor governance also poses a bigger risk to foreign investment than the precarious security situation. Since the 1990s Mali has privatised many of its profitable sectors in an effort to attract external capital. Despite recurring terrorist attacks throughout the country since 2012, inflows have remained constant. However the purchase of a presidential jet for US$40 million and the uncovering of inflated defence contracts led the IMF to temporarily suspend assistance in 2014. Allegations of mismanagement of donor funds also halted the disbursement of US$4bn pledged in 2013 by 55 countries and international institutions for Mali’s reconstruction – by December 2014 it was estimated that only 50% of funds pledged had been received. These resources were intended, and desperately needed, to stimulate the economy, repair damaged infrastructure, rebuild government institutions and train the military.

Towards transparency

Within just four years, Mali has gone from being a “beacon of democracy” to the 29^th most fragile state in the world. Continued military action against jihadists is certainly important for security, but of equal importance to the stability of the nation and the future of its citizens are rapid improvements in the transparency and effectiveness of governance. This essential truth must not be overlooked.

Kamissa Camara is the Senior Program Officer for West & Central Africa at the National Endowment for Democracy (NED) and a Fellow with Foreign Policy Interrupted but she writes here in her personal capacity. Kamissa blogs at www.kamissacamara.com and tweets @kamissacamara

The post Mali is becoming a failed state and it is not the jihadists’ fault 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.
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• 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

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Le général français

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.

On Wednesday 5 October 2016 we were joined by Fr.Atta Barkindo, from The Kukah Center and doctoral research candidate at SOAS,  and Hilary Matfess, from the Institute for Defense Analyses. The event also launched ARI’s latest Counterpoint – “How Boko Haram exploits history and memory” by Fr. Atta Barkindo.

Fr. Atta Barkindo

• To understand the appeal of Boko Haram you need to make a distinction between the period prior to 2009 and the period after 2009. In the early 2000s people donated money to the group because they wanted to support the Islamic values it promoted. At that stage Boko Haram was not violent, and as such it was able to freely communicate with people about its religious beliefs and values. After 2009, when the approach became violent, people became less likely to join or support the group voluntarily, though many still did. The emergence of Boko Haram is not as important to understand as the why and how of the group’s transformation.
• Boko Haram’s leaders, Mohammed Yusuf and Abubakar Shekau, have made use of the region’s history and exploited a collective memory. Translating over 50 of their YouTube videos I was struck by how frequently they referred to the Kanem-Bornu empire. What this has enabled them to do is successfully localise jihadi-salafi ideology. They describe Kanem-Bornu as a flourishing Islamic empire with good economic relations that were destroyed by the colonial powers who not only took it over but replaced it with a corrupt, western secular state system. It is against this system that Shekau constantly rails. The historical account may not be accurate, but it serves an important function for Boko Haram. They use history and memory for three things: target selection, atrocity justification and recruitment. When I interviewed former Boko Haram members in prison they could repeat verbatim sections of the YouTube videos I had transcribed.
• If you are really going to be serious about counter-radicalisation then you really need to sit down and listen to what these people have to say. This was not the approach taken at the start of the conflict. The Nigerian government saw them as poor, hungry, ignorant people – President Goodluck Jonathan called them “faceless masquerades and ghosts”. But Nigeria is now approaching its eighth year of military engagement with Boko Haram and the end of the conflict is not yet in sight. The violence perpetrated by the insurgents is abhorrent. But if we listen to them, their grievances reflect the voices and concerns of a particular set of people in a particular environment and context. For me, you can kill every single member of Boko Haram, but unless you understand how the group thinks and the environment from which it has emerged you will not eradicate them.
• The socio-economic and political environment in north-east Nigeria lends itself to the emergence of groups like Boko Haram. Citizens feel marginalised and ignored by the government, both at federal and state levels. The construct of the western state has been imposed on northern Nigerians without noticeable improvements to their daily lives. The Nigerian state is dominated by corruption, identity politics and impunity. These are drivers of conflict across the country and are why we see the continuation of conflicts in the Delta and between pastoralists and farmers.
• Boko Haram is not a Kanuri movement, and a lot of Kanuris denounce Boko Haram, but at the same time Kanuri identity and networks have been co-opted by the group. Shekau has taken advantage of local worker unions and utilised the Kanuri language to manoeuvre in the region. Historically, Maiduguri, the capital of Borno State, has been connected not with Lagos but with towns and people across the borders in Chad, Niger and Cameroon. These connections have been utilised by Boko Haram to outsmart the Nigerian military, whose reliance on the use of federal character principles mean that many soldiers fighting Boko Haram do so without an understanding of the language, the culture and the history of the region.

 Hilary Matfess

• The role of gender is poorly understood in conflict studies generally. The tendency is to group “women and children” together, but in doing so we give the same agency to a child as we do to a woman. As “victims” is not the only way to understand the experience of women in Boko Haram.
• Operationally women have played a role as suicide bombers – more than 100 in the last 2 years – but they are also logistical lynchpins of the insurgency. They keep the camps running by cooking, cleaning and portering. Women have also been used as a bargaining chip in negotiations by Boko Haram and their value to the group is well understood. It is noteworthy that the shortest time between YouTube videos, was in the immediate aftermath of the capture of schoolgirls from Chibok and the international outcry that followed.
• Women who are forcibly conscripted into Boko Haram are referred to as those who are oppressed and downtrodden, terms of pity that imply the need for help. However some women I talked to voluntarily chose to join Boko Haram and spoke of experiencing a sense of “empowerment”. They received daily Koranic education, were banned from farming and the back-breaking labour that entails, and when married would receive the bride price normally given to their family. Boko Haram sees itself as a vanguard of Muslims and women’s role in it is crucial.
• The level of gender representation in the Nigerian political sphere, particularly in the north-east is very low. Governor Shettima of Borno State has at least spoken publically and positively about the role women can play in the reconstruction, but it can sometimes to be difficult to see in reality. A Ramadan feeding scheme I observed was supposed to issue bags of rice that would be collected by women only, but when I went to see the distribution I saw only men in the collection lines. Implementation is just as important as design and in some communities cultural practices are at odds with gender mainstreaming in policy.
• There is sizeable stigma facing women who have been part of Boko Haram. Many community leaders treat them as carriers of a disease; even families ostracise their own kin, even in cases of abduction. The process of societal reintegration is going to be very difficult at the end of the conflict and there is little-to-no planning as to how it will be done. When Nigeria reaches a post-conflict situation women will have a vital role to play in societal redevelopment as so many men have been affected by the violence.

Excerpts from the discussion

Is it important to differentiate between the different factions of Boko Haram?

(Murray Last, University College London)

AB: There is a valid question about the group’s heterogeneity but I believe there are also lines of continuity. Boko Haram is a collection of disparate cells, more criminal the further north you go and comprised of foot soldiers that have different motivations for joining. They can be members, followers, sympathisers or simply passers-by and opportunists caught up in conflict. But at the top, there are clearly ideologues that motivate and show others the way. I chose to focus on them, to look at what is it they teach and what it is they tell their followers. The eloquence of Shekau and Yusuf is rarely mentioned, but when you listen to them speak you can begin to understand their appeal. I don’t like the atrocities Shekau extolls but I find him fascinating to listen to; he can so easily switch between languages to deliver specific messages. In one of the most recent videos Shekau insults Buhari in Fulani – the president’s own language. It was a deliberate strategy to speak directly to Nigeria’s head of state. Shekau was not educated in the west, but his clarity of thinking and logic in Kanuri, Hausa and Arabic means that dismissing him as uneducated, as often happens in Nigeria when people do not speak English, is dangerous.

What does it mean for Boko Haram to be aligned to ISIS?

(Ludovica Iaccino, International Business Times)

AB: We first must ask ourselves what is a link: is it physical, ideological or inspirational? Is it not possible that I can Skype with a terrorist in Malaysia and learn something without ever meeting face-to-face? If you listen to the Boko Haram videos they draw inspiration from the writings of scholars from Saudi Arabia. This is because in Saudi Arabia they practise monarchy and therefore do not glorify democratic values – in fact they denounce them. We should not be limited to saying that there is only a link when Islamic state physically delivers weapons to Boko Haram. The ideological link is very important. I have never met Pope Francis, yet I am inspired by him every day.

To what extent has the Nigerian military’s response exacerbated the conflict in the region?

(Eva Anderson, Transparency International)

HM: The abuses committed by the Nigerian military are one of the factors that allowed Boko Haram to evolve as it did. In Maiduguri someone I spoke with compared the relationship between citizens and the military to being “like Tom and Jerry, the cartoon”. Trust is higher in the Civilian Joint Task Force (CJTF) but its role in efforts to resolve the conflict poses longer-term problems for the state regarding what to do with these armed, often young, men. CJTF numbers 26,000 in Borno State alone and there is no real accountability mechanism in place to monitor their actions. Local mistrust of the military has created a simmering crisis – once Boko Haram has been defeated what do you do with the CJTF? Absorbing some into the formal security sector is one option, but others are needed.

AB: The problems facing Nigeria’s security service predate the Boko Haram insurgency. Long years of lack of reform of the military meant that training was not up-to-date on things like guerrilla warfare and cyber terror. This impacted on the response.  When I started my research I visited over 25 police and military barracks and the conditions I saw were deplorable. Single rooms meant for individual occupancy were housing families of eight. This is the root cause of the problem. When you ask a soldier to stand by the roadside you shouldn’t be surprised he asks for a bribe as he is always thinking about how he can raise money to move out of the barracks. In him, there is already a grievance against the state so even though he is fighting he is most probably doing so to keep his job. It is important to pay tribute to the individual soldiers who have sacrificed their lives fighting Boko Haram.

Is the Nigerian state a predatory entity? And how does this impact on the humanitarian response?

(Matthew T Page, former US State Department Nigeria expert)

HM: The scale of displacement in Lake Chad basin is huge. Estimates suggest 1 in every 7 residents is displaced. Nigeria has emergency agencies at federal, state and local government levels that, on paper, should be caring for these IDPs. However, at the camps I visited, the military and police are in charge. They are managing the gates and deciding what, and who, go in and out. On a recent visit I was unable to access a camp without express permission of the military even though I had permission from the director of the state emergency agency. This means that security services are running the humanitarian response and that raises a number of issues. Firstly, it turns displacement centres into possible targets as the insurgency is anti-state; and secondly, it increases the vulnerability of women to violence and sexual assault. As a result of these problems with official IDP camps the vast majority of displaced people in north-east Nigeria live in informal camps or with extended kin networks. This raises a question about whether channelling aid to the formal camps, when so many people live outside them, is fully addressing food insecurity.

AB: Let me give you an example of the predatory nature of the whole response. So many people in Nigeria now are coming forward as counter-terror experts; they are submitting bids for consultancy work when they don’t know the first thing about the subject. The Boko Haram insurgency has created an independent economy where people, at many different layers, are involved for personal gain. Relief materials continue to go missing. The lack of trust between citizens and the state is painfully obvious.

Why and how should we listen to Boko Haram? Who can listen?

(Elizabeth Pearson, King’s College London) 

AB: I want to go against the narrative that Boko Haram is simply faceless. Before 2009 they were preaching freely in states across the north-east and most of the YouTube videos were readily available on cassette, video and CDs in local markets. I think if you want to research Boko Haram you should go directly to the source and that is what I did.

We also have to look for invisible signs of extremism. If your drive from Jos going north there are writings on the walls and street signs in Arabic saying things like “down with democracy” & “Islam is the solution”. The Nigerian state has not responded sufficiently to the needs of these citizens.

I strongly believe that despite the atrocities of Boko Haram they really have something to say, if we can listen to them. I spoke to an imprisoned former member who was angry about the 25 car convoy of the Gombe state governor, “all the cars need to be fuelled, driven and have policeman who need to be fed”. You may think that this is a madman talking but I think he is saying something very important about the huge financial waste in maintaining Nigeria’s political democratic system. Listening to Boko Haram will help us to counter them.

See the conversation via Twitter #BokoHistory

Event recording

Films of Fr Atta Barkindo and Hilary Matfess

The post Boko Haram: the importance of listening appeared first on Africa Research Institute.

The last man still standing

In the week before 27 April 2016 – the day Sierra Leone celebrated 55 years of independence – musician Emmerson Bockarie launched his latest album. “Survivor” reportedly sold 12,000 copies within 24 hours of being released. Emmerson is not someone to shy away from controversy. His self-proclaimed status as “the last man still standing” is a reference to his continued artistic independence and resistance to political interference.

Back in 2007 Emmerson’s album “Borboh Belleh” (meaning “gluttonous boy”) castigated perceived failings of the Sierra Leone People’s Party government. In an election year, it gathered widespread popular support which the All People’s Congress (APC) used to its advantage. After his election as president, Ernest Bai Koroma specifically recognised Emmerson’s outstanding ability to raise public awareness through music. It is fair to say that the APC response has not been so positive this time, not that Emmerson seems perturbed. He told journalist Umaru Fofana “I have made up my mind to do what I am doing and cannot stop now”.

Striking a chord

One track in particular, “Munku boss pan matches, e jus dae krach”, highlights the rampant corruption that – Emmerson charges – has become part of the culture of the APC government. The title translates as “ill-educated people who keep lighting matches one after the other, just to see the fire again, for no other reason than because they can”. What this alludes to – and this was very clearly understood by the people I spoke with in Freetown – is the recent spate of corruption and the mismanagement of state resources by politicians and government officials only interested in advancing their own interests rather than the development of Sierra Leone.  An equivalent metaphor in English might be “like kids in a sweet shop”.

With a playtime of 15 minutes, the lyrics of the song prod and probe at length. They question the commitment shown by all government departments to the construction of roads even when it is not within their remit to do so and despite the glaring needs elsewhere: roads are an infamous source of kickbacks. They condemn the empty promises made regarding jobs for youth. They accuse MPs of failing to represent the voters and of being “under the brown envelope payroll” and question the validity of the “more time” agenda that supports an extension of the incumbent governments mandate, due to expire in 2018, to continue mitigating the disruption inflicted by Ebola. As for the president himself, Koroma is accused of accelerating his accumulation of wealth as he nears the end of his time in office and of indulging in a lavish lifestyle starkly at odds with that of most Sierra Leoneans.

Public reaction       

“He [Emmerson] sings for us,” Foday Conteh, a taxi driver from the president’s home town of Makeni, told me. From health workers, to university students and staff, to business owners the response of everyone I spoke to about the song was similar: a wry smile followed by a question as to whether I understood the meaning of the lyrics. There was broad agreement that Emmerson was speaking the truth.

Of course, some disagree. Writing in Cocorioko, editor and a diplomat appointed to the UN by President Koroma, Kabs Kanu asserted that “Emmerson’s lyrics did not reflect the true story about what President Koroma has done for our nation. There have been far more than just road construction in Sierra Leone. Every aspect of national development has been touched by the President”. At various locations in Freetown, Airtel billboards depicting the artist were vandalised.

Emmerson’s accusations would be difficult to prove in a court of law, but they have certainly been embraced by a receptive audience.  Amid the blare of horns in Freetown’s gridlocked traffic, the song resonates from the shared taxis on which so many commuters rely.

For most Sierra Leoneans water shortages, increases in the cost of living – the Leone has plummeted against the US$ since August 2014, driving up the cost of many foodstuffs – and a lack of formal sector employment are the everyday realities. Beyond new roads and a few token traffic lights, there is little sign of much-needed investment, for example in health care, education or agriculture. For now, citizens continue to endure the hardships with good humour. But if the wealth divide continues to widen, and poorer residents of Freetown are forced to suffer even more while a fortunate few thrive, there will come a point when something will have to give.

Jamie Hitchen is Policy Researcher at ARI. He wishes to extend special thanks to Joseph Macarthy for his invaluable assistance in bringing clarity to the song lyrics where he was unable to do so. 

The post “Kids in a sweet shop”: corruption in post-Ebola Sierra Leone 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.

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

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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

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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, ARI published a Briefing Note that 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.

On  28 April 2016, ARI invited three speakers to draw upon their experiences and expertise in order to discuss the state of state governments in Nigeria:

 ‘Dapo Oyewole

 Podcast

YouTube

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