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ENGINEERING NEWS: Corruption in Zim’s use of almost $1bn…

Elections are fast approaching in Zimbabwe, giving rise to popular expectations and international hopes for change but equally to a blatant increase in government corruption from the last remaining sources of official funding.

Is this uptick in the misuse of official funds a sign that the ruling party, Zanu-PF, believes it is in a fin de regime scenario? Reports from civil society, opposition parties, and independent media houses that the Zimbabwe government is misusing the International Monetary Fund (IMF)- allocated Special Drawing Rights (SDRs) for nefarious purposes come shortly after a January report by the Sabi Strategy Group predicting that opposition leader Nelson Chamisa would defeat incumbent President Emmerson Mnangagwa in elections expected in July or August this year.

The largest funding and spending controversy emerged over the Mbudzi Interchange, a public project aimed at eliminating congestion in the capital, Harare. A recent government Gazette reported that government took out an $88-billion loan from a controversial source to fund the project after having said, according to local news reports, that it had allocated SDRs equivalent to $144-million to the same project.

According to the gazette, the Zanu-PF government signed the loan agreement with Fossil Mines – a sister company to Fossil Contracting, which was awarded many of the tenders to construct the Mbudzi Interchange – to fund the project. Fossil Mines is owned by Obey Chimuka, who, along with Fossil Contracting, was sanctioned by the US Office of Foreign Assets Control in December, owing to his links to a previously sanctioned individual, Kudakwashe Tagwirei, and his company, Sakunda Holdings. Tagwirei is a Zimbabwean business tycoon with close links to Mnangagwa.

The methodology – government agrees a loan with a private-sector entity, which is then paid by public borrowings, or, as in this case, concessional allocations – is one that Zanu-PF elites have used repeatedly to extract rents from the Zimbabwean economy. Local news reports cite finance ministry public relations director Clive Mphambela as saying government would repay the loan using a drawdown of SDRs. The controversy has raised concerns from prominent figures in Zimbabwe, such as former finance minister Tendai Biti, and has led to parliament’s public accounts committee chairperson, Brian Dube, this month calling on finance minister Mthuli Ncube to provide further details of the deal. It is unlikely that the Zimbabwe government will disclose this information.

The Zimbabwe government’s track record on SDRs is poor, frequently using them in ways other than they were intended. For those unfamiliar with the instrument, the IMF created SDRs in 1969 to serve as a low-cost foreign exchange reserve asset to support official existing reserves in liquidity-constrained member countries. A member country, generally through its central bank, can exchange SDRs for either freely usable currencies or to repay a loan with the IMF. The IMF discloses the amount of SDRs transferred and the type of transaction used to deploy them but does not account for how hard currency is spent. It is up to the governments of member countries to disclose specific details about how SDRs are utilised – which, as in the case of Zimbabwe, has created an opportunity for corruption.

In September 2009, the IMF allocated about $408-million worth of SDRs to Zimbabwe – the first significant IMF involvement with Zimbabwe for more than a decade – as part of Zimbabwe’s share under a general allocation of SDRs amounting to roughly $251-billion, owing to the global financial crisis. The IMF withheld $102-million of Zimbabwe’s allocation by placing it in escrow, because the country was $140-million in debt to the IMF. At the time of the SDR allocation, opposition politicians raised concerns that Gideon Gono, the then-governor of the country’s central bank, the Reserve Bank of Zimbabwe (RBZ), would use the allocation for personal gain. These concerns proved to be warranted. In 2014, Gono’s adviser, Munyaradzi Kereke, provided Zimbabwe’s constitutional court with an audit report alleging that Gono and then Finance Minister Biti had siphoned off almost $50-million from the RBZ account that was part of the SDR allocation. Kereke later withdrew his case against Gono and apologised for making corruption allegations.

With the Covid-19 crisis, the IMF waived its traditional reticence and once again allocated SDRs equivalent to $958-million to Zimbabwe in August 2021 as part of a general allocation of SDRs equivalent to about $650- billion to all IMF member countries. Very soon after the release, newspapers criticising the lack of transparency over the Zanu-PF government’s use of SDRs, found a mismatch between how much government said it had spent on the procurement of Covid-19 vaccines using SDR drawdowns and the number of vaccines it had bought. Moreover, local media found that some $80-million SDRs – intended for rural and peri-urban households – was being used in electioneering for the 2023 general elections.

Sabi Strategy’s poll sees Chamisa winning with 53% of the vote and his party, the Citizens’ Coalition for Change, winning the legislature, but it assumes elections will be free and fair. Veteran Zimbabwe watchers know this is impossible, which means that corruption, fraud and misappropriation of this fresh injection of hard currency is just Zanu-PF business as usual.

ENGINEERING NEWS: A lot at stake in Nigerian poll

It is hard to overstate the importance of Nigeria’s February elections. The country’s security, social, economic and business environments are in a parlous state. The army has lost control of northern and north-eastern borders to Islamist extremists, including Boko Haram, its allies and its rivals. In the southern oil-producing Niger Delta, organised oil theft and illegal petrol refining go unchecked and coastal pirates plague international shipping. Inland, groups of armed bandits kidnap schoolchildren and hold their parents, state governors and government to ransom.

Everywhere, banditry makes life harder. Since 2016, the number of people living in extreme poverty has increased from 70-million to 88-million of Nigeria’s estimated 200-million population. The country has barely benefited from soaring oil prices following Russia’s invasion of Ukraine because oil production has fallen to real output of 900 000 barrels a day – and not the 1.1-million barrels a day on which government forecasts are based. Falling oil production has pushed Nigeria’s production into second place in Africa behind Angola. Annualised inflation shot to 20% in December, and food inflation of about 23% eats into ordinary Nigerians’ earnings. Africa Confidential succinctly summarised the shameful legacy of President Muhammadu Buhari’s two terms in office: “Millions of Nigerians are unwell, uneducated, hungry, angry, emotionally exhausted and desperate for change.”

Fortunately, since the country’s transition to democracy from military rule in 1999, over 100-million registered voters will take that anger and exhaustion to the polls in general elections on February 25 to end Buhari’s political inertia, policy drift, and government in the Presidency by a tiny cabal. That vote brings some hope of recovery. Though vastly shrunken, Nigeria’s gross domestic product is $110-billion. It is a tethered giant. Even small reforms can bring major improvements to the investment environment.

Of the three main contenders to succeed Buhari – Bola Tinubu, Atiku Abubakar and Peter Obi – former Lagos state governor Tinubu is most likely to win. Founder, funder and kingmaker of the ruling All Progressives Congress (APC), Tinubu brings a substantial war chest, all the power of incumbency, control of the ruling party and of State security. Tinubu was the first opposition governor of Lagos state. The then federal government starved Tinubu’s Lagos of funds. In the words of a former government official, “in order to have money to steal, Tinubu set about creating money”. He did this by reforming Lagos state’s tax collection, awarding collection to a private company, which a 2021 court case alleged Tinubu secretly controlled. The company took a 10% commission on all taxes collected, which soared from $24-million in 2002 to $720- million in 2021. What people recall is that Tinubu used that tax revenue to clean up Lagos state – from which he allegedly benefited through the award of contracts to improve infrastructure. His successors followed his example and Lagos state – which is also Nigeria’s commercial capital – is now perceived to be the country’s best run, most functioning state.

Former head-of-customs-turned- businessperson Abubakar is the opposition People’s Democratic Party’s candidate. Though he served as former President Olusegun Obasanjo’s Vice President from 1999 to 2007, voters have rejected his bid to become President five times and observers say they are likely to do so a sixth time.

While both Tinubu and Abubakar have money, election wild card Obi does not. A senior banker and businessperson-turned-politician, Obi is the new generation of professional class politicians – neither ex-military nor former civil servant nor part of the revolving political elite. Obi has served as governor of Anambra state. Though his tenure was repeatedly contested in the courts, he managed to improve state finances, health and education, which has marked him as one able to deliver. He has a loyal and significant following among Nigeria’s young, Internet- and social-media-savvy youth as well as professionals . Obi’s backers hope he will secure enough votes to become a potential kingmaker or to sway new government appointments. His candidacy will almost certainly place him in pole position for the next general election. At 62, he is the young man of Nigerian politics. Remaining an influencer this time is perhaps the most Obi can hope for, as his Labour Party has no formal national infrastructure and he does not have funds to secure a victory. However, the power of youth and social media activism has surprised Nigeria’s ruling elite before: in October 2020, antipolice protests organised and funded by social media resulted in #EndSars protests across half the country.

Money is the essential ingredient in Nigeria’s elections. While the election process is widely regarded as credible – an extraordinary feat in a generally disorderly environment, party political machinations are less so. Establishing nationwide party infrastructure to ‘secure’ every election post requires $200-million, according to a veteran election watcher. Tinubu reportedly has tight control on elections and electioneering, having learned from previous campaigns – notably Goodluck Johnathan’s failed campaign in 2015, where campaign managers pocketed large sums of money and left the result to chance. Corrupting voters is on a grand scale. Previously, vote-buying was a cash transaction – now it is digital. To counter social media campaigns that urge voters to take the money and still vote as you wish, this time parties offer funds via smartphone redeemable only with a photo of a voting card. Organisers are now seeking to ban cellphones from voting booths. A new rule came into effect in the last elections that party funds are held at the central bank, while a more recent rule that bans drawing cash deposits from government department accounts comes too late: siphoning of government funds to election campaigns has steadily taken place over the last 18 months.

Much is at stake and much depends on what Tinubu will do if he wins. He has already presented a credible Cabinet team to deliver his ambitions to deliver growth of 7%, reduce unemployment, double the size of the army and the police and double the size of the economy in ten years. Investment banker Wale Edun, Tinubu’s former state commissioner of finance, is tipped as federal Finance Minister. Several fear that Tinubu, now elderly, infirm and tired, will follow the Buhari model, sit out two terms, appoint a cabal and disintegration will continue. Cynical Nigerian observers say Tinubu inherits a country with no money. Their best hope is that he will again “create the money to steal”, but this time, nationwide.

Overarching threats and opportunities in 2023

As most of sub-Saharan African businesses race towards the end-of-year close and the prospect of a summer or festival break, it is time to reflect on yet another year hurtling by at breakneck speed. Why does it seem so? Across Africa, the greatest disruptor of all – climate change – seemed to step up havoc as the global response went into reverse gear.

Talks at the United Nations (UN) Climate Change Conference in November shifted from limiting climate change to accepting a need to adapt to missing the goal of limiting the 1.5 ºC increase in global warming. Drought – the worst in 30 years – intensified across North Africa’s agricultural heartlands, turning Algeria and Morocco into grain importers. Drought in the south has worsened dam levels feeding already poor hydropower plants, prompting power rationing in Zimbabwe and Tanzania. But with Egypt hosting COP27, Africa’s plight as the victim of the West’s historically profligate consumption of resources at least placed restitution on the COP agenda for the future and also highlighted the role of Africa’s rainforests as a solution to what is increasingly a climate emergency.

But as the continent faces up to nature, a more temporal influence marked disruption even before the world brought the Covid-19 pandemic to heal. Temporal in that it’s due to the pride, vanity and corruption of one man, a dictator of the old order, Russia’s Vladimir Putin, who sent the Russian army into Ukraine with orders to take control and subjugate Ukraine in three days. Western resistance to Putin’s imperial ambitions sent shockwaves through the global economy which ricocheted around Africa. The Ukraine-Russia denouement is likely to dominate at least the first half of 2023 and will leave some African countries more geopolitically battered than others.

With the continent barely recovering from Covid-19’s massive disruption to north-south trade, Russia’s invasion of Ukraine had a whiplash effect of immediate hikes in oil import costs and grain and food supply shortages, adding to import bills, all resulting in sharp hikes in inflation, which, in some countries, reached double digits for the first time in decades. The geopolitical uncertainty that the invasion sparked saw a capital flight from emerging markets: Egypt’s pound devalued by 14% after foreign investors pulled billions of dollars out of that country in response to Russia’s actions.

As ever in conflict, there are winners and losers. The European Union’s (EU’s) setting – and meeting – its target to slash its dependence on Russian oil and gas by 90% by the third quarter resulted in a host of deals that were highly favourable to several African oil and gas producers. Africa’s oil provinces suddenly became attractive all over again, with Western oil giants, several of which were forced to pull out of Russia in response to sanctions, looking to accelerate new projects in Angola, Algeria, Tanzania and Gabon.

Once again Africa has become the table on which the neo-Cold War geopolitical ping-pong is played as the EU and the US put pressure to mitigate the supply disruptions that Russia’s invasion has caused. Some countries have played the crisis to their great advantage – notably Tanzania and Gabon.

The war and demand for gas sparked a flurry of diplomacy, with EU and US officials seeking to shore up support and limit Russia’s influence. Germany’s Chancellor, Olaf Scholz, visited Senegal in pursuit of a gasfield, outgoing Italian Prime Minister Mario Draghi shuttled from Rome to Algiers to boost ENI’s gas production, Norway’s Equinor secured liquefied natural gas (LNG) projects in Tanzania, while the UK’s Perenco plans to invest $1- billion in a second LNG plant that would make Gabon a major LNG producer by 2026. Algeria and Angola, both long-standing allies of Russia and with valuable business links to Russia, have been less than receptive. Algerian President Abdelmadjid Tebboune rejected US calls to boost gas exports to Europe and Sonatrach CEO Tawfiq Hakkar said the company would not be an alternative for Russian gas in Europe.

Not to be outdone, Russian Foreign Minister Sergei Lavrov’s own diplomatic shuttle secured support from Ethiopia, taking advantage of souring relations with the West over the Tigray conflict. Russia supplied Sudan with grain and has looked to set up a new trade bank with Mozambique. But almost everywhere Lavrov went, he was followed by US or EU representatives. His visit to Uganda was followed within a week by US ambassador to the UN Linda Thomas-Greenfield, and US Secretary Anthony Blinken followed him to the Democratic Republic of Congo (DRC). While most countries have been able to work the geopolitical scene in their favour, a very negative impact of the conflict has been the influence carried by Kremlin-aligned mercenary group Wagner, which has provided support for military coup d’états in Mali, Burkina Faso, Guinea and in Sudan. But with Wagner being pulled back to Russia to join in the conflict, a security vacuum will be left that will continue the negative impact into 2023.

In a significant and marked change to regional relations, regional bodies are taking more of a prominent role in resolving regional military coups and crises. Thus, the Economic Community of West African States has taken the lead over the resolution of the military coups, with neighbours imposing sanctions on coup leaders in Burkina Faso and Mali. The year started with Côte d’Ivoire’s Prime Minister Patrick Achi launching a $55.1-million antiterrorism plan in the country’s north-eastern regions to prevent any overspill from Burkina Faso and Mali. This effort was replicated in Ghana.

In East Africa, new Kenyan President William Ruto is muscling in on Angola’s President João Lourenço’s reputedly effective diplomatic intervention in the Great Lakes conflict, raising concerns over Ruto’s motives and expansionist agenda.

Meanwhile, a bumper crop of elections in 2023 and 2024 will dominate the political arena. Arguably, the most important are those in Zimbabwe. The best outcome would be a Zambia-style landslide win for the opposition, but it is likely Zanu-PF will repeat its age-old tactics to retain power and continue to render Zimbabwe a State-sponsored criminal enterprise. The other major election is in Nigeria. Again, there is little prospect of change, with the two main candidates both wedded to continuing Nigeria’s legendary kleptocracy.

ENGINEERING NEWS: Glencore – Africa’s textbook case of corruption…

Diversified commodity trading and mining multinational Glencore has taken up tenth place in global corruption’s hall of shame. In the first week of November, the UK’s Serious Fraud Office (SFO) ordered Glencore Energy UK, the UK subsidiary of the Switzerland-headquartered giant, to pay £280-million (equivalent to $325-million) after an SFO investigation revealed it had paid $29-million in bribes to gain preferential access to oil in Africa.

This follows a settlement deal agreed with US Department of Justice (DoJ) regulators in May, in terms of which the company was charged with, and pleaded guilty to, violation of the US Foreign Corrupt Practices Act (FCPA) and a commodity price manipulation scheme. Glencore was forced to pay $700-million in criminal penalties and forfeiture.

The size of the US award pushes Glencore into the big league of proven corrupting companies. It assumes its place among the enforcement log kept by the US anticorruption site, the FCPA blog. Glencore joins US-based Goldman Sachs ($3.3-billion), France’s Airbus ($2.09- billion) Brazil’s Petrobras ($1.7-billion), Sweden’s Ericsson ($1.06-billion) and Telia ($1.01-billion), Russia’s MTS ($850-million), Germany’s Siemens ($800-million), the Netherlands’ Vimpel ($795-million) and France’s Alstom ($772-million) as this list’s tenth member.

Glencore plc has set aside some $1.5- billion for estimated fines for what the UK judge, Justice Peter Fraser, described as “not only significant criminality but sophisticated devices to disguise it”. This echoes the statement of the US attorney for the Southern District of New York earlier this year that for Glencore “bribery was built into the corporate culture”. The company’s shareholders may feel that that money would be better spent on dividends or even on community-based programmes in the countries from which it derives its revenue.

The investigation that led to these record fines revealed a cavalier attitude to all international anticorruption norms, starting with the executive leadership’s attitude to win business “no matter what it takes”, according to US attorneys. Indeed, two of the individuals involved in the bribery scheme were members of Glencore’s Business Ethics Committee!

Glencore executives hired private jets to ferry money from one African country to another to pay bribes in Nigeria, Cameroon, Equatorial Guinea, Cote d’Ivoire and South Sudan. The company kept a cash desk in Switzerland to fund the bribes, which were variously described as expenses – up to $15-million worth of office expenses. The SFO reported that two of Glencore’s West Africa desk executives flew to South Sudan by private jet, carrying $800 000 in cash. The money had been withdrawn from the cash desk at Glencore plc’s Swiss headquarters and recorded as expenses for “opening [the] office in South Sudan”. The money was paid through a local agent to officials in the newly established government in South Sudan.

The SFO’s successful prosecution of Glencore represents a significant first for the understaffed and poorly funded agency, which has made a series of blunders in recent years, with costly prosecutions coming to nothing.

The Glencore case is the first in which a corporate has been convicted under the UK’s Bribery Act 2010 “for the active authorisation of bribery, rather than purely a failure to prevent it”. With a significant notch on its belt, and its £4-million ($4.64-million) costs paid as part of the settlement, its confidence to do more is likely to have increased. What is also new is the increased cooperation between international regulators and enforcement agencies – in this case, between US and UK regulators in the investigation and prosecution of Glencore. Moreover, law firms are increasingly looking to define and to represent victims of the crimes of bribery and corruption, whether they be corporate rivals that lost out on deals that were won with bribes or governments.

One such law firm is the UK’s RPC. Although the firm – representing the Federal Republic of Nigeria – lost its application in October for a portion of the criminal compensation that Glencore paid the SFO to be returned to Nigeria, a precedent exists. In February, the SFO agreed a portion of sums awarded to the UK Treasury for bribery in Nigeria would be paid to the federal government to repay Nigeria’s lost tax revenue from corruption.

The case also opens the door to these victim countries’ own regulators to act against corrupt companies. In South Africa, where Glencore has its origins, several organisations have called for the company’s activities to be investigated. Those shouting the loudest are opponents of President Cyril Ramaphosa who claim that there was something untoward in Ramaphosa’s owning shares in a coal mining company, Optimum, which Glencore acquired in 2012. Ramaphosa divested himself of the shares in 2014, when he became Deputy President.

Optimum gained notoriety following Glencore’s alleged forced sale of the mine to the infamous Gupta brothers in December 2015. Glencore rejects claims that Ramaphosa had any involvement in the company’s management and South Africa has not featured in either the DOJ or SFO findings to date. However, the DOJ and SFO cooperation on corruption investigations is relevant for South Africa’s National Prosecuting Authority. Not only are the work and costs shared, but a portion of these substantial fines could cover the costs of future anticorruption investigation and enforcement.

As for Glencore, which has admitted guilt, it claims that it is under new management and is a reformed organisation where bribery and corruption have no place. But it has had to agree to a DOJ-mandated three-year compliance monitoring programme, its former staff could face criminal investigation for their involvement and failure to prevent bribery, and the risk remains that the company will continue to face compensation claims from the victims of these crimes. As the saying goes, it ain’t over until the fat lady sings.

ENGINEERING NEWS: Zambia’s new dawn might just be a…

Surveying Africa for the latest trends can be dispiriting. West Africa has been sucked into the mire of a fresh round of military coups d’état as Russia extends its neocolonial project to the continent. In East Africa, the uneasy truce between Tigrayan rebels and Ethiopia’s national army has collapsed, leading to a fresh outbreak of conflict. In Southern Africa, Zimbabwe’s inflation rate has become world-beating again behind Venezuela and Sudan, and the organised criminal activity of South Africa’s electricity utility, Eskom, is adding to Nigeria-style power outages of longer than six hours a day. All the while, Russia’s war against Ukraine has hit fuel- and grain-importing countries hard, pushing annual inflation in Botswana, Ghana and Nigeria into double digits.

Then there’s Zambia, which, I must say, provoked an ‘Ahh Zambia’ moment. What a difference a year can make! Under new management for a little over a year, Zambia stands out as extraordinary in every sense. President Hakainde Hichilema and his United Party for National Development have done an enormous amount to restore the foundations of Zambia’s economy and its democracy. It’s worth remembering that it’s a restoration job because Zambia’s democratic tradition was established in the early 1990s. Its economic reforms and expansion programme extend that far back, too. The five years of Zambia’s sixth President, Edgar Chagwa Lungu, are a populist aberration – an interregnum – now consigned by a landslide democratic vote to history.

A year into Hichilema’s government, business confidence and activity trends are both up. Stanbic Bank’s July Purchasing Managers’ Index, from a survey of 400 firms across sectors including agriculture, construction, industry, services and wholesale and retail, to measure business conditions in the country, stood at 50 – up from record lows set during the Covid-19 pandemic. Levels of employment are up and the Zambia Revenue Authority reported above-target revenue collection performance for the first half of 2022, with net collections during that period up by 24%, compared with the same period a year earlier.

Hichilema has formed a public–private dialogue forum composed of Finance Minister Situmbeko Musokotwane, Commerce Minister Chipoka Mulenga, Agriculture Minister Reuben Phiri and Tourism Minister Rodney Sikumba to drive State and private- sector activity in government’s job creation and innovation for economic growth and social development priorities.

Critically for Zambia’s immediate future is that Hichilema has successfully completed negotiations with the International Monetary Fund (IMF) – begun under Lungu – for a £1.3-billion ($1.44-billion) deal, which will do much to underpin economic stability. Many will recall that Zambia became the first African country to default on its international debt obligations during the Covid-19 pandemic. The IMF pulled no punches in stating that the country’s economic problems resulted from “years of economic mismanagement”. The deal is the first step in what promises to be some tough renegotiation of Zambia’s debt, which reportedly stood at $17-billion in December 2021, owed to a range of investors, including the Chinese government as well as eurobond holders.

Hichilema, a chartered accountant and former head of PwC Zambia, has already started the tough negotiations before the deal, cancelling some $2-billion in undisbursed loans from creditors. These notably included Chinese Export-Import Bank and the Industrial Commercial Bank of China’s $1.6-billion for upgrades to the dual carriageway between Lusaka and the Copperbelt reserved for construction by China’s Jiangxi Corporation. Huawei’s loan for $333-million against a national broadband roll-out was also cancelled, raising the prospect of a return to international competitive bidding for contracts. Internally, HH, as the Zambian President is affectionately known, has slashed wasteful and unnecessary spending: his post on Twitter describing how he rejected a request from “the system” to sign off on new vehicles for the country’s mayors went viral.

The IMF had specifically called on Hichilema to address procurement and corruption. The now unhindered Anti-Corruption Commission (ACC) has made a series of high-profile arrests, including those of three directors of the Honeybee Pharmacy involved in a high- profile $17-million procurement fraud – collusion between Honeybee, the Health Ministry and the Zambia Medicines Regulatory Authority for medical supplies that were later found to be defective. The ACC has also arrested Lungu’s special adviser, Hibeene Mwiinga, for possessing property reasonably suspected to be proceeds of crime – mainly vehicles worth $2.5-million. The ACC has extended its interviews to several high-profile members of Lungu’s Patriotic Front-led government, including former Lands and Natural Resources Minister Jean Kapata.

The proof is in the pudding. In just one year of sound management and efforts at stabilising the economy, Zambia’s inflation rate bucked continentwide trends and dropped from 24% to 9.7% – the greatest gift to Zambian consumers. Overall confidence meant inflows to the country have seen the Zambian kwacha become the best-performing currency in the world against the US dollar, rallying over 18.5% from January to September. This has allowed South African retailer Shoprite to slash the price of some 800 consumer goods in its nationwide stores.

And, with an eye on Zambia’s long-term and future productivity, Hichilema’s government, at the close of its first year in office, completed its nationwide teacher recruitment programme to employ some 30 000 new teachers for State schools to back up its introduction of free education for primary and secondary school students, laying the foundation for Zambia’s New Dawn to last longer than Hichilema’s constitutionally permitted two terms.

ARC Briefing Kenya September 2022: Ruto sworn in…

Kenya Summary 19 September 2022

William Ruto (2022-present) is sworn in as Kenya’s president on 13 September. He inherits an economy struggling with heavy debt, high inflation, high unemployment, an unstable currency, burgeoning debt, and growing hunger caused by one of the worst droughts in decades. Ruto has stamped his authority on Kenya’s parliament, with his allies securing key posts in both chambers. Ruto posts, and later deletes, a Tweet revoking Kenya’s long-standing recognition of the Sahrawi Arab Democratic Republic (SADR), causing an immediate uproar online. Kenya’s economic situation deteriorates further as customers face record increases in fuel and electricity. Tourism and wildlife minister Najib Balala says Kenya’s tourism sector has seen its earnings more than double to KSh 167.1 billion ($1 billion) in January to August from KSh 83 billion ($688m) in the same period last year.

Ruto sworn in as president after Supreme Court validates election results…

William Ruto (2022-present) was sworn in as president of Kenya, East Africa’s largest economy, in Nairobi on 13 September in a ceremony attended by several African presidents and heads of governments. Ruto inherits an economy struggling with heavy debt, high inflation, high unemployment, an unstable currency weighing heavily on recovery efforts and burgeoning debt, and growing hunger caused by one of the worst droughts in decades.

Ruto was sworn in a week after the Supreme Court on 5 September validated his electoral victory in last month’s election (see ARC Briefing Kenya Aug 2022). Official results indicate that Ruto, who served as deputy president from 2013, won 50.5% of the votes while former prime minister Raila Odinga won 48.8%. In its ruling, the seven-member Supreme Court led by Chief Justice Martha Koome said on 5 September that it found no discrepancies in the vote tallies and no credible evidence that the electoral commission’s computer systems and transmission networks had been breached or failed. Koome also said that allegations that some citizens had been prevented from casting their votes or that ballot boxes were tampered with were unproven.

In his inaugural address, Ruto announced a wide range of measures to help reduce the cost of living and boost food production. However, he shed little light on concrete plans to address Kenya’s debt beyond saying the government “must stabilise” its public finances. The country’s public debt ballooned to KSh 8.6 trillion ($71 billion) in June, from KSh1.9 trillion ($16 billion) in 2012 when the Uhuru Kenyatta (2013-2022) administration came into office.  This has left the country at high risk of debt, according to the International Monetary Fund (IMF). The cost of servicing the debt is reportedly expected to rise by a third to a record KSh 1.39 trillion ($12 billion) in the fiscal year through June 2023, more than half the projected state revenue. Government also spent almost 57% of tax income in the past financial year to pay off loans.

According to an index developed and published by risk consultancy Verisk Maplecroft on 27 June, Kenya is among a list of countries including Sri Lanka, Ecuador, Peru and Iran facing a heightened risk of civil unrest as their governments struggle with the aftershocks of the surge in inflation. Prices have reportedly risen due to the increase in grain and energy costs as a result of Russia’s invasion of Ukraine, while the worst drought in at least 40 years has left almost 5.2 million people facing hunger. Kenya’s overall inflation increased for the sixth consecutive month to 8.5% in August, from 8.3% in July, largely driven by high food and fuel prices. The government’s target inflation rate is 5%, with a flexible margin of 2.5% on either side in the event of adverse shocks.

Ruto stamps authority on Parliament…

After his razor-thin margin victory in the 9 August general elections, President Ruto has stamped his authority on Kenya’s parliament, with his allies securing key posts in both chambers. Duly elected lawmakers took their oaths at the parliament building in the nation’s capital, Nairobi, on 8 September. The 349-member National Assembly processes budget allocations and legislation, and approves presidential appointments including cabinet ministers, heads of state agencies and envoys. The Senate with 67 members focuses primarily on matters affecting the administration of the country’s 47 counties.

Long-serving parliamentarian and senior member of Ruto’s Kenya Kwanza coalition party, Moses Wetangula, was elected speaker of the National Assembly, the third most senior role in government after the president and deputy president. Wetangula defeated Kenneth Marende, who served as speaker of the National Assembly from 2008 to 2013 and had the support of the alliance led by Raila Odinga. Another Ruto ally, Amason Kingi, was elected speaker of the Senate on 8 September.

Ruto’s Kenya Kwanza party is not expected to struggle to pass legislation in parliament after securing the majority in both chambers (see ARC Briefing Kenya Aug 2022). Kenya Kwanza won 172 out of 349 seats, giving it a controlling majority, while Raila Odinga’s Azimio la Umoja One Kenya party secured 164 seats in the national assembly. Independent candidates won 12 seats. Kenya Kwanza also won the majority in the Senate, albeit only by one seat.  Kenya Kwanza won 24 of the 47 available seats, and Azimio la Umoja One Kenya won 23.

Attaining control of parliament is key for Ruto to control the legislative agenda, as well as make budget allocations and executive appointments. He plans to invest at least KSh 500 billion ($4.2 billion) in farming, which employs more than 40% of Kenya’s workforce, and to set aside KSh 50 billion ($420m) annually for the so called “Hustler Fund” to boost small businesses, which may require lawmakers to review the 2022-2023 national budget approved in April. Ruto also told supporters on 7 September in Nairobi that he plans to change parliamentary rules to allow ministers to appear before legislators to answer questions about their roles and performance. Ruto claims that the move will help to increase accountability.

Ruto is currently in the process of selecting his cabinet. He is reportedly set to appoint former vice president Musalia Mudavadi as head of cabinet under a new power structure. Mudavadi served as finance minister from 1993 to 1997 and as vice president for two months in 2002. Others rumoured to be named in Ruto’s cabinet are party leaders in the Kenya Kwanza coalition, including former National Assembly Speaker Justin Muturi, former Machakos governor Alfred Mutua, and former lawmaker Moses Kuria.

Fertiliser diplomacy reportedly behind Ruto’s Sahrawi gaffe …

Just one day after being sworn in as president, Ruto committed his first diplomatic gaffe as president.  Taking to social media platform Twitter, Ruto revoked Kenya’s long-standing recognition of the Sahrawi Arab Democratic Republic (SADR), hours after meeting with Morocco’s foreign minister, Nasser Bourita, at State House in Nairobi.  Ruto made the surprising announcement a day after Sahrawi president and Polisario Front leader Brahim Ghali attended his inauguration, and was publicly recognised before dignitaries and attendees at the event.  In his original tweet, Ruto said:

“At State House in Nairobi, received congratulatory message from His Majesty [Morocco’s] King Mohammed VI [1999-present]. #Kenya rescinds its recognition of the SADR and initiates steps to wind down the entity’s presence in the country.”

The Tweet caused an immediate uproar online as well as a diplomatic furor, leading Ruto to delete it. Ruto issued a more reserved Tweet on the same day stating:

“Kenya supports the United Nations framework as the exclusive mechanism to find a lasting solution of the dispute over Western Sahara.”

Ruto’s failure to explain his reason for posting the initial Tweet has caused major confusion regarding Kenya’s policy on the Morocco-Saharawi stalemate. Morocco claims as its own the territory in Western Sahara that the SADR has claimed since 1975 after Spain vacated its former colony (see ARC Briefing Morocco Mar 2022). The United States (US) became the first country to recognise Morocco’s claim under the administration of former US president Donald Trump (2017-2021) in December 2020.  

Nairobi-based political analyst Hillary Ingati speculated that Ruto deleted the Tweet because he “must have received wrong advice. That was undiplomatic of him.” The Communist Party of Kenya, which also condemned Ruto, said on 15 September that he is “living up to long held fears that he is a brute who is prone to influence for self-gain.” A local source told Africa Risk Consulting (ARC) that Ruto’s gaffe is a sign of “presidential immaturity and arrogance”:

“He doesn’t even have a cabinet nor consulted with parliament and feels the need to change decades-long policy unilaterally after a brief meeting with a Moroccan official.”

Analysts in Kenya have suggested that Ruto’s promise to deal with Kenya’s high cost of living by lowering prices for fertilizer may have been the reason for rescinding recognition of the SADR. Morocco is one of the world’s largest producers of fertiliser and is important to Kenya, as it has the ability to offer much-needed supply to local farmers at a cheaper price. Ruto has become the first Kenyan president since independence in 1963 to have announced an end to the decades-long policy of supporting Sahrawi’s right to self-determination through a referendum. Kenya also is the first African country to do so publicly.

… as Ruto follows up on pledge to cut fuel subsidies

Kenya’s economic situation deteriorated further as customers faced record increases in fuel and electricity in the same week that President William Ruto was inaugurated. The Energy & Petroleum Regulatory Authority (EPRA)said on 15 September that the retail price of a litre of petrol, diesel and kerosene in Nairobi had increased by KSh20.18 ($0.16), KSh25 ($0.2) and KSh20 ($0.16) to KSh179.13 ($1.49), KSh165 ($1.37) and KSh147.94 ($1.23), respectively. The record high price increases come at a time when the government and the International Monetary Fund (IMF) have agreed to end the fuel subsidies that have been cushioning customers.

TheEPRAeliminated the fuel subsidy on gasoline on 14 September, sending energy prices surging by about 13% and inflicting more pain on citizens already struggling with the skyrocketing cost of living. The move, which is expected to be unpopular with some motorists, fulfilled a campaign promise by Ruto to remove the subsidy that has been blamed for depleting the state’s already strained coffers. Ruto faces the dual task of bring skyrocketing living costs under control and stabilising government finances. However, critics of the price-relief measure said the fuel subsidy protects those who can afford private cars. The EPRA decided to maintain diesel and kerosene subsidies, which will help soften the blow for low-income earners who use the latter for cooking and lighting, and depend on public transport. In a further blow to customers, the Public Service Vehicles (PSVs) association on 16 September announced a 30% fare increase after fuel prices hit an historic high on the cut in the fuel subsidy.

IMF country representative Tobias Rasmussen said the IMF, which classifies Kenya as being at high risk of debt distress, welcomes the removal of the subsidy, recognising “the very limited fiscal space that Kenya has”. Inflation in country is on track to hit double figures in the fourth quarter of this year due to global price pressures.  In his inauguration speech, Ruto said that government had expected to spend KSh 280 billion ($2.32 billion) on fuel subsidies through the end of the fiscal year in June, equivalent to what was budgeted for development. Nairobi-based Sterling Capital Ltd head of research Renaldo D’Souza said on 15 September that “it was clear from the onset that the fuel subsidy was unsustainable in the long run”. D’Souza added that Ruto is expected to “make a few unpopular policy decisions” in a bid to reduce living costs.

Tourism earnings double

Tourism and wildlife minister Najib Balala said in a statement on 16 September that Kenya’s tourism sector has seen its earnings more than double to Ksh 167.1 billion ($1 billion) in January to August from KSh 83 billion ($688m) in the same period last year. Balala said the impressive earnings were a result of a 91% rise in the number of international visitors to 924,814 due to a recovery from Covid-19, and that he forecasts strong tourism growth to the end of the year. Tourism together with tea, horticulture and remittances are Kenya’s top foreign exchange earners.

However, the Kenya Civil Aviation Authority (KCAA) on 16 September reinstated some health requirements that were introduced to limit the spread of Covid-19 and introduced charges for travellers arriving in the country. This has raised concerns that it may impact the tourism industry as it appears to be recovering from Covid-19. Kenya had relaxed travel restrictions after the positivity rate dropped and the availability of vaccines helped in dropping some of the demands and requirements. The easing of requirements was aimed at encouraging foreign travel, tourism and trade in the country. A statement shared by the Kenyan High Commission in London (United Kingdom) on 16 September, noted that all travellers above 12 years of age without proof of vaccination or polymerase chain reaction (PCR) will be subject to a rapid antigen test at their own cost. KCAA noted that passengers without proof of the test will be required to pay KSh 3615 ($30). Those testing positive at a port of entry, will be subject to a PCR test at their own cost of KSh 6025 ($50) and undergo isolation as required by the ministry of health.

The ministry of health announced on 17 September that it had recorded eight new Covid-19 cases from a sample size of 787 tested in the past 24 hours. The country’s positivity rate as of that date sits at 1.0%. The total number of confirmed cases in Kenya as of 17 September stands at 338,332 from a cumulative test of 3,872,921 conducted since March.

ENGINEERING NEWS: Kenya’s election heralds a change in leadership

When a UK politician known equally for her religion as for her politics said of her own party leader that “there’s something of the night about him”, it stuck. The same could be said of William Samoei arap Ruto, whose election as Kenya’s President was confirmed by the country’s Independent Electoral and Boundaries Commission (IEBC) on August 15.

The results that the commission settled upon – because settling on a result has become the norm in recent Kenyan elections, as they are invariably disputed, including by over half the commission’s members – show that the victory was a narrow one at 50% to 48% and the country is divided by a Ruto leadership.

Ruto, 55, learned his politics at the feet of the late Daniel arap Moi, the kleptocratic dictator-President who served from 1978 to 2002. As head of the youth wing of Moi’s then ruling party, the Kenya African National Union, he gained a reputation as something of an enforcer. Fast forward to the 2007 elections, when – after polls had closed – the main politicians unleashed a wave of violence to influence the results. That politically orchestrated violence killed 1 500 Kenyans, while a further 350 000 were internally displaced. The economy went into shock and lost 7% of its gross domestic product as tourism just stopped.

The knock-on effect on Kenya’s neighbours was immediate, too, as arterial routes to Uganda, Rwanda and the eastern part of the Democratic Republic of Congo were blocked, causing shortages of essential goods and an uptick in inflation. For their part in orchestrating the violence, the outgoing President, Uhuru Kenyatta, and Ruto were referred to the International Criminal Court (ICC). The case against Ruto was eventually terminated, but Ruto was not acquitted. The ICC’s explainer as to why the judges did not acquit is telling: “There was evidence which suggested that witnesses had been interfered with and because there had been political interference in a manner that was likely to have intimidated witnesses, the case should be declared a mistrial, leaving by that the possibility for a future prosecution afresh.”

The domestic and international business community is wary of a Ruto Presidency. Such is the fear he inspires that, in discussing him, business people speak in hushed tones without mentioning his name outright – as if every restaurant’s central flowerpot were bugged! One recently went so far as to say Ruto made the hairs on the back of his neck stand on end.

While in these elections Ruto presented himself to Kenya’s youthful voters as ‘a hustler’, the rags-to-riches story, the guy who made it from selling groundnuts at the side of the road, to Vice-President, and then to Presidential candidate, business leaders speak of Ruto’s ruthlessness in extracting corrupt rents from Kenya’s businesses. He has played a central role in the political elite’s legendary corruption and avarice. According to the Nation newspaper, Ruto has accumulated 18 520 acres of land in three counties – much of it controversially – five helicopters, two hotels, three private residences, a gas company and a poultry farm. Privately, businesspeople mutter about more – the holdings that are likely to be hidden behind nominees in the murky offshore world. Violence, assassination, land grabs and corruption litter every profile written about Ruto.

What’s already known about Ruto is little comfort to international diplomats or businesspeople, and they ask themselves: How will he be as President? Other questions arise too, notably how he will consolidate his political power base – and for how long. His ambition is well known but will he, like the outgoing President, conspire to alter the Constitution to remain in power like Yoweri Museveni in neighbouring Uganda?

If there are any positives to draw from this result, it is that Ruto is known as a grafter. Unlike the outgoing President, Ruto does not drink alcohol. His day reportedly begins at 5:00 with his focus on the main job – winning power. He keeps fit. A graduate of the University of Nairobi, he took his studies further while in office and was awarded a doctorate in 2018. During his election campaign, he sought to allay business fears – and reportedly gave what one business leader called “a very good account of himself” when he addressed the business community a few months ago. He reportedly presented his case well and far better than his ageing Presidential opponent, Raila Odinga.

Kenya will definitely need a grafter. Acceding to the Presidency now is to win something of a poisoned chalice. The outgoing President may be remembered in the business community as being friendly and as having improved infrastructure. However, above all, he saddled the country with huge debts. Add to the debt a post-Covid economic shock, drought and, since February, the effects of Russia’s illegal invasion of Ukraine and the extent of the problem is clear. All this will limit Ruto’s fiscal ability to have much impact. Charismatic, as most populists are, Ruto has won over the youth with promises to support the youth and small and micro businesses. But the reality is a high cost of living (6%) with prices of petrol and food – most notably the staple maize flour, which has tripled – all increasing sharply.

Another positive is that this election took place as Kenya’s 2010 Constitution starts to take hold. The new Constitution – which Ruto opposed – has greatly reduced the power of the Presidency, devolving it to Parliament and county governors. The new Supreme Court has shown its teeth by kicking out Kenyatta’s attempt to alter the Constitution to extend his term in office. Will Ruto try it? Almost certainly. Leopards can’t change their spots.

ENGINEERING NEWS: Upcoming elections a test for Kenya’s new…

Plus ça change, plus c’est la même chose – the more things change, the more they stay the same – comes to mind when casting a casual eye over Kenya’s August Presidential and Parliamentary elections. Since the end of the one-party State in 1991, Kenyan elections have served to rotate power between the entrenched members of Kenya’s ruling political and economic elite, which every few years battles it out in what appears to be a numbers game of coalitions between allied regional and ethnic groupings.

This time, voters will be called on to replace Uhuru Kenyatta, son of the country’s first post-independence President, Jomo Kenyatta, with one of two frontrunning candidates with a similar history. Raila Odinga is the son of Oginga Odinga, Jomo Kenyatta’s first Vice-President and veteran opposition leader, while William Ruto learned his political trade as a youth leader at the feet of the country’s second President, Daniel arap Moi.

Orchestrated violence and electoral manipulation are never far in Kenyan polls. After the December 2007 elections, some 1 000 people were murdered and over 350 000 internally displaced. Both Uhuru Kenyatta and Ruto were named in International Criminal Court (ICC) proceedings for their alleged involvement. The ICC’s cases against both men were subsequently dropped. Similarly, in 2017, Kenya’s Supreme Court cancelled Kenyatta’s win – based on opposition allegations that hackers had inserted an algorithm into the Independent Electoral and Boundaries Commission’s new system to ensure a Kenyatta victory. This, after the electoral commission’s information technology director was found murdered, with apparent signs of torture.

The stakes in Kenya’s elections are high, as are political tensions, but a new Constitution constrains behaviour and excesses for the first time. The Constitution – which 67% of Kenyans approved in a referendum in 2010 – was designed as an antidote to the 2007 to 2008 election violence. Although the Constitution is now 12 years old, elections are still largely uncharted territory. Since its enactment, the judiciary, police, electoral commission and ethics commission have all been flexing their newfound powers.

The 2010 Constitution places limitations on the political elite in ways to which they are unaccustomed. As I write, the ethics commission, for example, has been removing candidates without an academic degree – and some presenting fake degrees! That the elite is feeling the constraints is clear, with both key coalition candidates having said implicitly and explicitly that they intend to change the Constitution. Crucially, for the first time, the President is limited to two terms – Kenyatta has to step down.

According to veteran prodemocracy and anticorruption campaigner John Githongo, what’s also new are the three D’s: democracy, demography and debt. We are where Sri Lanka was nine months ago, he says. Kenyatta restructured the economy – most productivity comes out of high levels of public spending – financed by eurobonds or debt held by Chinese banks. With a splurge on infrastructure spending, Kenya’s debt portfolio has ballooned from $2-billion to current levels of $90-billion, consuming 70% of revenue. Although growth is reported at 11%, inflation is 5% to 6%. East Africa is facing its fourth year of drought and the election risk factor has unsettled investors. The Kenyan currency has lost 35% of its value. According to some, Kenya is now considered among the countries likely to default on their debt.

Added to this are the social consequences of Covid-19, the inflationary impact of Russia’s aggression against Ukraine, and deeper inequality. This has had a particularly negative impact on Kenya’s burgeoning youth – the country’s median age is 20. As elsewhere, poor economic conditions leave the youth open to populist messaging or to opt out altogether from a political system that never seems to change.

Ruto is running a highly populist campaign, presenting himself as the bootstrap politician – the rags to riches story – running against Odinga, whom he portrays as a member of the establishment, the political elite. It’s a populist trope the world has seen played out in the US and the UK, and most recently in France. Ruto is young and energetic, renowned for his sobriety, focus, hard work, ambition – and ruthlessness. While few of the 20- something voters remember what he is alleged to have done in the wake of the 2007 vote, the prospect of a Ruto Presidency has seen several long-term investors move assets offshore. One claimed Ruto would be like Moi – whose rule was notoriously corrupt and brutal – “on steroids”.

Meanwhile, at 77, Odinga is the old man of Kenyan politics. Nevertheless, he is an experienced politician and a master coalition builder. He has managed to garner the-anyone-but-Ruto vote and is inching ahead in polls – a trend which, if it carries through to election day, spells trouble, including violence.

This election will be a test for Kenya’s new Constitution and its long-term adherence to democracy. Pre-election messaging from the Ruto camp is that the Constitution cannot keep a two-term Presidential limit and that to make a difference, a President must be in power for 20 years!

Engineering News: Elon Musk promises a return to social…

Zambia’s President Hakainde Hichilema is famous for his expert use of social media platforms. His opponents taunted him as President only on social media – until the quiet crowds of his young social media-active followers lined up to give him a landslide victory last year.

Inspired, Zimbabwe’s new opposition party, the Citizens Coalition for Change (CCC), and its leader, Nelson Chamisa, are highly active on social media to encourage voter registration and voting – and to hold government to account for violence against its activists. It appears to be having results: Chamisa’s party won 19 of 28 seats in by-elections held in March, while the ruling Zanu-PF took only nine of the contested seats. The CCC’s bright yellow brand is well suited to social media and its visual algorithmic distribution.

Elsewhere, a citizen activist who tweeted about Ugandan President Yoweri Museveni’s ‘supersized’ son used social media to alert the world that he was being abducted by the military. The tweet may have saved his life but did not prevent his extensive torture.

Hichilema, now in office, continues his expert use of social media to highlight policy and discuss his goals and objectives. His most recent tweets celebrating World Press Freedom Day on May 3 highlight the collision course that traditional, social and new media are on:

• “We have a free operating environment for the Press. If there’s any nagging things that you see, let us know and we compare notes. The Ministry of Information is here and even State House is there. Let’s resolve issues collaboratively.”

• “Let’s work as a team to improve the working environment for the Fourth Estate. Thuggery like storming of radio stations should be a thing of the past @hichilema”

• “There are only Zambian military bases in #Zambia. Let’s not be debating falsehoods #PressFreedom.”

Great goals – to restore press freedoms that the thugs associated with former President Edgar Lungu’s regime routinely violated – but beyond creating a free legal and operating environment for a professional media, government has no role. The press, if truly free, must have access to power and be free to criticise it, but never as part of a government- inspired team. The third tweet shows where the President’s office and the Information Ministry have a role – to quash ‘fake news’ immediately.

Grappling with aspects of press freedom and freedom of expression brings to the fore another extraordinary event: the news that South African-born, Pretoria-raised billionaire Elon Musk spent $4- billion to buy Twitter, the social media platform favoured by Presidents, journalists and citizen activists alike. Twitter’s new owner claims to be in favour of free speech and has promised to make its algorithm public, make users identify themselves and rid the platform of non-human bots, as well as take the platform private – away from the scrutiny or interference of the markets and indeed most of the world’s media regulators.

However, media analysts fear that Musk objects to Twitter’s self-regulation, fact-checking and sanctioning of users – most famously ex-US President Donald Trump, preferring the ‘Wild West’ approach where anything goes in terms of freedom of speech and expression, no matter how offensive, lawbreaking or fake. The second aspect of Musk’s acquisition is the commercial one: Tesla’s stock makes him the richest man in the world but, as a new media baron, he is diversifying for the time the ubiquity of high-end electric vehicles hits his Tesla stock price. What that means for Twitter is that eyeballs on advertising will be just as important as they are now – meaning that a distorting algorithm fostering controversy and division and having angry people shouting into the Twittersphere will remain essential to the business model.

The prospect of another US-based billionaire – unaccountable to any of Africa’s elected governments or its people – having enormous unregulated sway over the political, social and economic lives of millions of people across Africa is a cause for concern and action. US-based platforms have shown themselves to be singularly deaf to African concerns about content that contributes to violence, proselytising terrorism, vaccine scepticism and other fake news. As elsewhere in the world, the end-to-end encryption of WhatsApp and the Meta (formerly Facebook) owned platform has ensured that this medium has become the main distribution channel for reams of fake information about Covid-19. Another South African, Simon Allison, launched The Continent – a new pan-African newspaper – uniquely distributed on WhatsApp and its rival, Signal, to counter WhatsApp as an unregulatable distributor of all-too-frequently fake news and false and harmful information by using it to distribute a quality newspaper – free.

What action is feasible? Africa’s leaders, journalists and citizen activists are at odds about what to do. The press needs social media to sell subscriptions but resent social media using their content and stealing their advertising revenues. Activists use it to raise the profile of single issues. Politicians recognise social media’s power is greater than the mainstream media ever was and now want to control it. Control usually means shutting down the Internet, causing millions of dollars of damage to the embryonic e-commerce sector. President Muhammadu Buhari banned Twitter from Nigeria altogether in 2020, after it had deleted one of his tweets for violating the platform’s policy on abusive behaviour.

The huge risk associated with social media is the algorithm that has the power to amplify any media message to millions of people all over the world – to capture an audience the size of the population of Kenya – in minutes. Unregulated and open to abuse – including by high-paying individuals, corporates, politicians or hostile governments – it risks curbing its value as a tool to strengthen democracy. Unchecked and programmed to amplify division and hatred, it can become dangerous very quickly, as recent xenophobic attacks in South Africa demonstrate. The anti-foreigner messages of the social media-led campaign, Operation Dudula, have escalated in recent times, leading to a rise in attacks in informal settlements: Elvis Nyathi, a 43-year-old gardener, was killed in Diepsloot, on the edge of Johannesburg, by a mob going door-to-door, apparently inspired by anti-immigrant social media ‘influencer’ Nhulanlha Lux Mohlauhi, who is often pictured in military fatigues. 

ENGINEERING NEWS: Nigeria’s oligarchs face pressure as Presidential candidates…

As international businesses scurry to close off any links to Russia’s sanctioned political and oligarch class, some of Nigeria’s politicians and would-be politicians may start to feel a little uncomfortable. Nigeria’s domestic politics is often very much as brutal as Russia’s, with a history of political assassination, poisoning of opponents and orchestrated political violence but also of godfathers managing the distribution of power, position and access to wealth.

Long before Russia’s post-Soviet oligarchs discovered London, the City of London was a favoured place for Nigeria’s oil-fuelled oligarchs to house their families, school their children and launder money technically belonging to the Nigerian State through London’s army of professional services, lawyers, trust companies and bankers. While Vladimir Putin is believed to have stashed $100-billion of Russian taxpayers’ oil money abroad through his loyal oligarchs, a Nigerian task force found that $100-billion of Nigerian taxpayers’ money had been siphoned off from Nigeria’s oil and gas industry since the end of military rule in 1999. Russia’s invasion of Ukraine has again focused regulators’ scrutiny on The City, its activities and favourite clients.

That scrutiny – or the fear of it – may be having a cautionary impact on Nigeria’s race for the Presidency in 2023. On April 11, current Vice President Yemi Osinbajo – well known as the ruling All Progressives Congress’s (APC’s) godfather and kingmaker Bola Tinubu’s man – announced his candidacy. Although the Vice Presidency has traditionally been a staging post for a Presidential campaign, Osinbajo is not thought to have “the killer instinct” for Nigeria’s politics, let alone run against a seasoned political godfather like Tinubu.

Former Lagos State governor Tinubu announced his intention to run for President in late January. However, he is already facing substantial domestic – and possibly international – obstacles to his candidacy. During his time as governor, Tinubu built a substantial electoral war chest. Then President Olusegun Obasanjo cut off Lagos state – a hotbed of opposition to the federal government – from federal funds. Undeterred, Tinubu set about reforming state tax collection so he could run the state. A tax collection contract was awarded to improbably named Alpha Beta Consulting LLP (ABC). ABC’s founder and accountant, Oladapo Apara, filed a lawsuit in June 2021 in which he accused Tinubu of concealing his control of the limited liability partnership. Apara alleges that Tinubu instructed him to transfer 70% of ABC’s shares to two individuals of Tinubu’s choosing, as a precondition to granting ABC the contract. During ABC’s tenure, tax collection rose from $24.01- million in 2002 to $720.59-million in 2021 – from which ABC LLP nets a tidy 10% commission. That Tinubu’s wealth stems from tax collection is one of those ‘well known facts’ that have swirled around Nigeria’s rumour mill ever since.

Improved tax revenues not only provide Lagos state with funds to greatly improve its infrastructure, but this reported war chest allowed Tinubu to bankroll a new opposition in 2014, now the ruling APC party. Tinubu backed President Muhammadu Buhari’s 2015 Presidential campaign – ironically on an anti-corruption ticket.

But in a changed global environment, especially one where US President Joseph Biden has targeted ‘kleptocracies’ – that is, states based on State capture – as a threat to US national security, and the US and the European Union increasingly use sanctions against corrupt politicians, Tinubu may be facing pressure from outside Nigeria. Despite London being home to Nigerian oligarchs’ money, any Nigerian Presidential candidate needs to be seen in Washington. Both ABC LLP and Tinubu were last seen scrambling for a court resolution and settlement of Apara’s claims.

Tinubu’s reaction to Osinbajo’s announcement of his plan to run in 2023 was to declare that Osinbajo was “not my son”. While Osinbajo may not have a killer instinct, he does have a reputation as a competent technocrat with a profound understanding of Nigeria’s multilayered and myriad problems. Nevertheless, some speculate that Osinbajo may end up as a front President for another Tinubu-backed Presidency. If Tinubu cannot have the Presidency, he will try to make sure he can control it. Others speculate that Osinbajo’s candidacy is a stalking horse, designed to open the ruling APC floor to more candidates as the party primaries season gets underway between now and June.

As Nigeria’s 23-year-old democratic Constitution takes hold, the Presidential and Vice Presidential candidates’ pool is now drawn from sitting governors of various competencies and experience. This is in marked contrast to the past, where a group of former generals determined the direction of party and country. According to one commentator, the generals’ views are irrelevant now. The inept Buhari – a former general and former military coup leader – is likely to be the last of that era. The political class is looking to back candidates who have achieved in government and in their states. Nigeria’s top performers include ambitious Kaduna governor Nasir El Rufai, who cofounded the APC after running a successful privatisation programme under Obasanjo. Although Borno State has faced sustained attack by Islamist groups, its governor, Babagana Umara Zulum, is tipped as a potential Vice President for his work with United Nations organisations to support relief efforts. Another, Anambra State governor Charles Chukwuma Soludo, oversaw the restructuring of Nigeria’s banking sector in 2006 and liberalised the exchange rate after decades of currency controls under military rule.

Perhaps the strangest candidate is Central Bank of Nigeria (CBN) governor Godwin Emefiele, who reversed Soludo’s liberalisation and reintroduced all the exchange controls (and abuses) that characterised military rule. Though he reportedly has the support of Lagos’ clique of megawealthy businesspeople, a local newspaper described Emefiele’s candidacy as “disturbing”, before listing a string of his failures, including “monetary policy contortions” and the slow slide in value of the naira. Lagos’ infamous rumour mill has it that he, too, has built up a significant war chest and may look to replace Tinubu – at least as kingmaker.

ENGINEERING NEWS: Africa and the Russia-Ukraine conflict

25th March 2022: “If the conflict continues for any length of time, the continent will once again have to pick sides – punting either for liberal democracy or becoming one of the client States of an authoritarian or military-backed dictatorship.”

ARC’s Tara O’Connor reviews the impact of Russia’s invasion of Ukraine on Africa’s geopolitical and economic future, and its effects on the international order. Read the full article here

ENGINEERING NEWS: New Omicron variant takes volatility and uncertainty…

10 December 2021: “The end of the year is traditionally when we muse about the year gone by as we look to the one ahead. This is difficult at the best of times, but the Covid-19 pandemic has taken volatility and uncertainty to new levels”

ARC’s Tara O’Connor reviews another year of the Covid-19 pandemic, a raft of international travel bans and how business and government can work together to build greater regional and pan-African resilience. Read the full article here.

ENGINEERING NEWS: Angola – taking on the oligarch-kleptocrats

19 November 2021: “As Angola, under the leadership of only its second President in about four decades, takes on the oligarch-kleptocrats and implements meaningful reforms, investors start to notice, but is it too late to woo voters?”

ARC’s Tara O’Connor examines President João Lourenço‘s political, economic and anticorruption reform programme. Read the full article here.

ENGINEERING NEWS: From Françafrique to France-Africa

22 October 2021: “France’s special relationship with Frenching-speaking nations, known as Françafrique, is undergoing a fundamental transformation would not have been obvious at the 28th Afrique-France Summit, in Montpellier. But, behind the scenes, the relationship is changing under President Emmanuel Macron – and with the encouragement of a modern crop of leaders and an increasingly globally connected and voting youth”

ARC’s Tara O’Connor examines the changing relationship between France and Françafrique. Read the full article here.